이 기사는 2020년 06월 19일 08:00 thebell 에 표출된 기사입니다.

Private equity firm Dominus Investment is investing in Ace Technologies Corp, betting on the burgeoning network communications equipment market due to 5G migration.

The Seoul-based firm plans to buy some 3.3 million convertible preferred shares issued by Ace Technologies for 25 billion won ($20.5 million), sources said on June 17. The transaction is expected to complete on June 30.

Ace Technologies, which manufactures wireless communications equipment, has its plants and offices in major countries such as the U.S., Britain, China and Vietnam. The Incheon-based company counts Ericsson, Samsung Electronics, KT Corporation and SK Telecom among its customers, with roughly 90 percent of total revenue coming from exports. Analysts expect the company to further benefit over the coming year from growing investment by mobile carriers in the 5G race.

“The market shares of Ericsson and Samsung Electronics are growing quickly as a result of the U.S.'s sanctions on Huawei and Nokia's slump,” an industry insider said. “This will help accelerate Ace Technologies’ revenue growth.”

Ace Technologies is said to use about a half of the proceeds, or 130 billion won, to expand its manufacturing facility in Vietnam. In 2018 the company relocated its plant from Incheon to Vietnam and has since planned to increase its manufacturing capacity in response to growing demand. With most of its products produced in Vietnam, the company is considered to be less affected by the coronavirus lockdown and the U.S.-China trade conflict.

Going forward Dominus Investment is expected to help Ace Technologies continue to grow by expanding its business areas and acquiring other businesses. This is consistent with the firm’s strategies applied to its current and previous portfolio companies to increase their value.

Ace Technologies’ 2019 revenue rose 0.3 percent year on year to 378.6 billion won on a consolidated basis, while operating income dropped 79 percent year on year to 2.7 billion won due to a sharp increase in operating expenses.

Dominus Investment will make the investment through its blind-pool fund that closed in 2017 at 480 billion won. With this investment, the fund is expected to deploy almost all of its remaining capital. The fund’s other investments include camera module company MCNEX, gas station operator Kun Hwa and mobile phone module maker Hyupjin Connector.

(Reporting by Ar-rum Rho)