이 기사는 2020년 06월 12일 08시00분 thebell에 표출된 기사입니다

South Korean steel ball manufacturer Parkwon Co Ltd is exploring selling a minority stake after a deal to sell a controlling stake collapsed.

Parkwon has signed a memorandum of understanding (MOU) with one of the potential buyers to sell a partial stake held by the company’s owner family, sources said on June 10. The two parties are negotiating terms of the sale, with Samjong KPMG managing the deal.

The company initially named private equity firm Corstone Asia as its preferred bidder to sell the owner family’s entire stake last October. But negotiations ultimately collapsed allegedly due to disagreements over the company’s valuation.

At the time the acquisition price was estimated at up to 200 billion won ($167 million), which represented an enterprise value of about 10 times the company’s 2018 earnings before interest, taxes, depreciation and amortization (EBITDA).

The deal size is expected to be reduced as the company’s owner family has decided to retain part of its stake. But there are chances that unexpected factors could affect the deal with other prospective buyers continuing to make offers to the company.

Founded in 1973, Parkwon manufactures steel balls for bearings. It counts major auto parts suppliers such as Schaeffler, SKF, Iljin and GMB Korea among its customers. The company is based in Jecheon, North Chungcheong Province, where it moved its plant in 2010 to expand production capacity. Parkwon also operates production sites in China and Vietnam. It recorded revenue of 34.4 billion won and operating income of 5.6 billion won for 2019.

The ball bearing sector continues to attract investors due to stable profitability. Parkwon’s peer NBG sold a controlling stake to a consortium of SBI Investment and Nano Co Ltd in 2018.

“Many ball bearing manufacturers generate steady profits based on their long history in the industry,” an industry insider said. “That's why investor interest is high in the sector, particularly in companies with succession issues and financing needs.”

(Reporting by Ar-rum Rho)