이 기사는 2020년 03월 30일 08:00 thebell 에 표출된 기사입니다.

South Korea’s LB Private Equity has completed the sale of most of its stake in EcoPro BM, reportedly generating about a 2.5x return.

LB PE has sold roughly 98 percent of its stake in EcoPro BM through open market transactions, which brought in a total of about 50 billion won, sources with knowledge of the matter said on March 25.

LB PE, which specializes in secondary private equity investments, invested in the secondary battery material company in December 2017 through its 121 billion won secondary fund which closed in July of the same year. Limited partners backing the fund include Korea Development Bank (KDB) and the Employment Insurance Fund under the Ministry of Employment and Labor.

LB PE bought 21 billion won worth of common shares in EcoPro BM at a price of 30,000 won per share from a fund jointly managed by BNW Investment and SKS Private Equity two years ago. The company was successfully listed on the Kosdaq last spring, and its stock has traded between 70,000 won and 90,000 won earlier this year. From the recent sales of its stake, the PE firm is expected to have earned gains equivalent to about 2.5 times its invested capital.

EcoPro BM is the only company in the country that produces NCA (nickel-cobalt-aluminum) cathode materials used in secondary batteries, holding the second largest market share globally behind Japan’s Sumitomo Metal Mining. Despite headwinds such as the coronavirus pandemic and a slowing economy, industry watchers remain optimistic about the company’s growth prospects.

Indeed, EcoPro BM signed a deal earlier this year with SK Innovation to supply Ni rich NCM (nickel-cobalt-manganese) cathode materials used in electric vehicle batteries. It also plans to set up a joint venture with Samsung SDI to develop materials for next-generation battery technologies.

The investment period of LB PE’s secondary fund will end in April, and the firm has so far exited two companies, Big Hit Entertainment and Eco Pro BM, among five companies in the fund’s portfolio.

In September 2017, LB PE invested 18.9 billion won in Big Hit Entertainment in a mix of common shares and redeemable convertible preference shares (RCPS). Eight months later, it sold its entire stake in the South Korean music label to Netmarble for 56 billion won, securing a multiple of 3x with an internal rate of return of 385 percent.

Other portfolio companies in LB PE’s fund include shoes retailer SMK T&I and car-sharing app operator SoCar.

(By reporter Kim Hye-ran)