Financial firms closely watch Hahn & Co.’s unit buyout Korean financial firms seek opportunities for acquisition financing on the PE firm’s deal
Translated by Ryu Ho-joung 공개 2020-02-12 08:00:00
이 기사는 2020년 02월 12일 08:00 thebell 에 표출된 기사입니다.
Major players in the South Korean financing sector are moving fast after the announcement of the planned acquisition of SK Chemicals’ biofuel unit by Hahn & Company, in a bid to seize potential opportunities to provide acquisition financing.SK Chemicals plans to sell its biofuel business to Hahn & Co., a South Korean buyout firm, for 382.5 billion won ($323 million), in a surprise deal announced in a regulatory filing last Friday. The transaction is expected to complete by the end of May.
After the news of the planned acquisition came, major financial firms are moving quickly to better position themselves for an opportunity to arrange acquisition financing for the deal, which could lead to more new opportunities involving Hahn & Co.’s portfolio companies in the future.
According to the bell’s 2019 league tables, South Korean financial firms arranged total acquisition financing of 22.3 trillion won ($18.8 billion), of which more than 20 percent, or 4.6 trillion won, were associated with buyouts by Hahn & Co. and refinancing of its portfolio companies’ debt.
Hanon Systems, which Hahn & Co. acquired in 2015, accounted for a large portion of acquisition financing related to the private equity firm last year. The auto parts manufacturer completed its bolt-on acquisition of Magna International’s fluid pressure and controls business in March 2019. Four domestic financial firms – NH Investment & Securities, Hana Bank, Shinhan Bank and Shinhan Investment – jointly arranged 900 billion won of acquisition financing for the deal. The same firms also provided the buyout house with a credit facility of 2.2 trillion won in September 2019, which was used to refinance the acquisition of Hanon Systems.
Ssangyong Cement, Hahn & Co.’s major portfolio company growing at a rapid pace with a series of bolt-on acquisitions, also continuously provides opportunities for acquisition financing activity. In February 2019, the buyout firm secured 1.3 trillion won in the second refinancing on the cement manufacturer from Mirae Asset Daewoo and Woori Bank, both of which initially provided about 1.9 trillion won of a credit facility for the refinancing of the company in January 2018.
It is uncertain whether Hahn & Co. will use acquisition financing for the purchase of SK Chemicals’ biofuel unit, as the funding structure of the planned acquisition has not been crafted yet. Given a relatively small transaction value, the private equity firm could fund the acquisition through its third buyout fund closed last year.
Financial firms nonetheless are expected to keep looking to ways to build a relationship with Hahn & Co., seeking potential opportunities in the future.
With the planned acquisition of SK Chemicals’ biofuel business, Hahn & Co. reportedly aims to capitalize on the rapid growth of the green fuel market. The business unit manufactures and distributes biofuels such as biodiesel and bio heavy fuel oil. The book value of its assets totaled 132.4 billion won at the end of 2018 and revenue was 277 billion won for 2018.
Industry watchers expect Hahn & Co. is likely to explore ways to maximize synergy between the biofuel business and the firm’s existing portfolio companies in the transportation sector, including H-Line Shipping, SK Shipping and K Car. This represents the likelihood of additional acquisitions by Hahn & Co. or its portfolio companies in the future, which is why financial firms are closely watching the latest deal, industry insiders said.
(By reporters Han Hee-yeon and Kim Byung-yoon)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재, 재배포 및 AI학습 이용 금지 >
관련기사
best clicks
최신뉴스 in 전체기사
-
- 경남제약 품는 휴마시스, 유통네트워크·진단키트 '시너지'
- [Company Watch]글로벌텍스프리, 프랑스 자회사 '적자 전환'
- [Red & Blue]'주목도 높아지는 폐배터리' 새빗켐, 침묵 깨고 반등
- [HLB '리보세라닙' 미국 진출기]시장 우려 불식 나선 진양곤, 갑자기 마련된 기자회견
- 효성화학 특수가스 사업부, '경영권 지분 매각'으로 선회
- 한양, 만기도래 회사채 '사모채'로 차환한다
- 동인기연, 'GS 출신' 30년 베테랑 전호철 상무 영입 '성장 방점'
- 에스트래픽, 적자 '일시적 현상'... 2분기 수익개선 기대
- [Company Watch]'자회사 회생신청' 투비소프트, 성과 없는 신사업
- '크라우드 펀딩' 와디즈, '테슬라 요건' 상장 추진