Affirma Capital seeks to sell entire stake in both SeAH FS, S&G Holdings

Affirma Capital, a Singapore-based buyout private equity firm, is seeking to sell its entire stake in both South Korean steel tube maker SeAH FS and Hong Kong-based S&G Holdings Ltd.

According to investment banking sources on Thursday, Affirma is in the middle of conducting a preliminary buyer survey on Korean and foreign institutions as well as PEF operators.

SeAH FS is Korea’s largest automotive steel tube supplier, specializing in small-diameter steel pipes.

Headquartered in Hong Kong, S&G Holdings’ business includes the marketing of semi-finished metal products. S&G manages SeAH’s overseas operations.

Affirma has hired NH Investment & Securities Co. as the deal manager.

SUPPLIER TO TESLA, GM, BYD, GEELY

Established in 1979, SeAH FS manufactures single-wound steel pipes, called TWS, and double-wound steel pipes, or TDW, used in home appliances and automobiles.

The company controls half the Korean market for small-size steel pipes with an outer diameter of less than 4 inches.

SeAH counts major electric vehicle makers such as Tesla, GM, BYD and Geely among its clients.

SeAH is the only supplier of brake lines to Tesla’s major plants in the US, China and Germany.

It also supplies steel products to electronics firms, including Samsung Electronics Co., LG Electronics Inc., Japan’s Daikin Industries Ltd. and Sharp Corp. and China’s Haier.

Recently, SeAH developed corrosion-resistant tubes used in premium refrigeration and freezing equipment and began supplying them to LG Electronics.

ESAP SEAH ALSO UP FOR SALE

SeAH FS operates 25 production bases in six countries – Korea, China, Thailand, Mexico, Indonesia and India.

The company is considering widening its target markets to Vietnam, Poland, Kazakhstan and Uzbekistan.

Last year, it posted 33 billion won ($23.8 million) in earnings before interest, taxes, depreciation and amortization (EBITDA), on sales of 462.1 billion won on a consolidated basis, including results from S&G Holdings.

Analysts expect SeAH FS to post 43 billion won in EBITDA on sales of 520 billion on a consolidated basis this year.

Affirma Capital is also in the middle of selling its 50% stake in ESAB SeAH Corp., a metal processing company, owned by SeAH FS.

Industry sources said Affirma may sell its ESAB SeAH stake separately or seek a package deal together with its SeAH FS stake.

ESAB SeAH, which specializes in welding rods used to weld joints of shipbuilding heavy plates, posted 146.1 billion won in sales last year.

Affirma Capital acquired SeAH FS, ESAB SeAH and S&G Holdings from SeAH Holdings in 2022.

Focused on buyout deals, Affirma is an independent emerging market private equity firm owned and operated by the longstanding senior leadership of Standard Chartered Private Equity. The PEF manages up to US$3.8 billion in assets for leading global limited partners and sovereign wealth funds.

Write to Ji-Eun Ha at hazzys@hankyung.com

In-Soo Nam edited this article.