SK Nexilis poised to sell thin film division to Affirma Capital
SK IE Technology and SK Enpulse are put on the market as part of SK Group's portfolio rebalancing
By Oct 30, 2024 (Gmt+09:00)
SK Nexilis Co., the world’s largest copper foil maker, is in the final stage of negotiations to sell its thin film manufacturing division to Affirma Capital. The move is part of efforts to prop up the copper foil business grappling with a slowdown in electric vehicle demand, according to people familiar with the matter on Monday.
SK Nexilis, wholly owned by chemical materials maker SKC Ltd, is expected to close a deal with the Seoul-based private equity firm to shed its flexible copper-clad laminate (FCCL) business, worth about 100 billion won ($72.3 million), as early as November, the sources told Market Insight, the capital market news outlet of The Korea Economic Daily.
FCCL, commonly called thin film, is a thin, flexible copper sheet. They are key materials in smartphone and TV displays as well as advanced telecommunication equipment.
One of the SK Group arm’s profitable mainstay businesses, the FCCL division has raked in 50 billion won to 60 billion won annually in earnings before interest, tax, depreciation and amortization (EBITDA).
The upcoming sale comes as SK Nexilis seeks to raise fresh capital to fund the overseas expansion of its copper foil facilities.
It is now in separate talks with private equity firms to sell new shares in itself. But they are drawing lukewarm interest amid a drop in EV battery demand.
AFFIRMA CAPITAL'S CARVE-OUT DEALS
Affirma Capital is betting on the FCCL market to grow in line with the rising demand for high-resolution screens embedded in cars and refrigerators.
The buyout firm has built a track record of carve-out deals for large business groups’ non-core assets and expanded them in bolt-on acquisitions.
In 2016, Affirma purchased a water management business from South Korea’s Kolon Group for 125.0 billion won and rebranded it as EMC Holdings.
Subsequent acquisitions of domestic waste management companies catapulted EMC Holdings into the top spot in the country’s waste treatment industry.
In 2020, Affirma sold EMC to SK Ecoplant Co., formerly SK Engineering & Construction Co. Ltd., for 1.05 trillion won.
Korea’s energy-to-telecom conglomerate SK Group controls hundreds of companies across four mainstay sectors: semiconductors and materials; energy and chemicals; information and communications technology; and logistics, services and bio.
SK Inc., the group’s holding company, has been in talks with another homegrown buyout firm, Hahn & Co., to sell specialty gas producer SK Specialty Co. for about 4.3 trillion won.
It has also launched the process of unloading SK IE Technology Co. and SK Enpulse Co., an electronics parts maker. It plans to merge AI semiconductor-related companies into one entity.
SK Ecoplant Co., a construction engineering and waste management company, recently jettisoned its entire stake in US-based lithium-ion battery recycling firm Ascend Elements Inc. to Seoul-based PE house SKS Private Equity for about $98 million.
STAKE SALES
In April, resources developer SK Earthon Co. sold its entire 20% stake in Peru LNG Co. to US liquefied natural gas company MidOcean Energy LLC for $256.5 million.
The same month, investment management firm SK Square sold its entire 2.2% stake in Korean gaming behemoth Krafton Inc. for 272.5 billion won through a block trade.
Write to Jong-Kwan Park, Ji-Eun Ha and Hyeon-woo Oh at pjk@hankyung.com
Yeonhee Kim edited this article.
-
Leadership & ManagementSK Group may beef up reform drive after CEO seminar
Oct 03, 2024 (Gmt+09:00)
3 Min read -
Corporate strategySK seeks sale of specialty gas unit for around $3 bn
Aug 19, 2024 (Gmt+09:00)
3 Min read -
Corporate investmentSK seeks to sell 13.3% stake in Chinese food firm Joyvio
May 20, 2024 (Gmt+09:00)
3 Min read -
BatteriesSK, Lotte cut copper foil output; to up Malaysia capacity
Nov 27, 2023 (Gmt+09:00)
2 Min read -
BatteriesSK Nexilis launches copper foil production in Malaysia
Nov 05, 2023 (Gmt+09:00)
3 Min read -
Mergers & AcquisitionsSK eyes $1 bn gains from Chinese copper foil firm exit
Aug 31, 2023 (Gmt+09:00)
2 Min read -
Mergers & AcquisitionsMBK to acquire Korea’s top FCCL maker NexFlex for $407 mn
Mar 17, 2023 (Gmt+09:00)
1 Min read -
Private equitySK Group's PE-funded transformation in the spotlight
Mar 07, 2022 (Gmt+09:00)
5 Min read