이 기사는 2022년 05월 25일 08시10분 thebell에 표출된 기사입니다

South Korea’s LS Automotive Technologies (LSAT), which is U.S.-based private equity (PE) firm KKR’s portfolio company, is showing a rapid growth as it expands its global customer base.

In July 2017, KKR signed a partnership agreement with the country’s LS Group to invest in LS Automotive, an electrical auto parts maker for the global automotive industry, and acquire and carve-out KCF Technologies, the copper foil and flexible copper clad laminate business formerly known as LS Mtron.

Under the terms of the agreement, an affiliate of KKR and LS Group together invested to create a new joint venture holding company and acquired the business of LS Automotive. KKR's 150 billion won ($118.5 million) investment was made from its $9.3 billion KKR Asian Fund III.

LSAT posted record revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) after KKR’s investment, with its revenue increasing by 19% to 903.2 billion won and EBITDA growing by 26.3% year-on-year in 2021 on a consolidated basis. It also recorded its first net profit of 5.4 billion won in the same period. Its financial structure has remained stable, with its debt-to-equity ratio standing at 154.6% and its debt-to-total-assets ratio at 36.9% as of the end of 2021 on a consolidated basis.

The dramatic improvement in the company's financial performance is attributable to KKR’s post-merger integration (PMI) process. After KKR made its investment, LSAT hired a new head of its overseas business division to attract new global automakers as clients and has strengthened overseas sales activities in North America, China, Japan and India.

The company also has carried out active investments. LSAT built a new plant in Mexico in April 2019 with an aim to expand its presence in North America. It also expanded its manufacturing facility in Chennai, India, in November 2019 to broaden its client base from Hyundai Motor Group and global automakers to local companies.

With an aim to improve management efficiency, LSAT upgraded its IT infrastructure by introducing cloud ERP and ATS. The company also upgraded its manufacturing facilities to smart factories and improved its productivity by introducing business intelligence and robotics process automation.

LSAT won orders worth 5 trillion won for four years from 2014 to 2017. The company won orders worth 2 trillion won each year from 2018 to 2021, up about 60% after KKR’s investment.

The company is focusing on increasing the sales of high value-added products while maintaining transactions with its largest client Hyundai Motor Group. It has also ramped up efforts to secure new global clients. Hyundai Motor Group and global clients each accounted for about 50% of LSAT’s total orders in 2018, but the portion of global clients reportedly increased to 70% in 2021.

LSAT has made efforts to keep the existing product lineups such as switches and also develop new products and technologies for future mobility amid fast business shift to eco-friendly vehicle components. Components for electric vehicles reportedly accounted for about 60% of its order book of 1 trillion won in the first quarter of this year, up sharply from 5% in 2018.

LSAT expects its revenue to grow 20% each year until 2026. The company‘s revenue is estimated to reach around 1.2 trillion won in 2023 and 2 trillion won in 2026. (Reporting by Gyoung-tae Kim)