LS Group’s US magnet wire unit to go public with $1.4 bn value

The US magnet wire unit of South Korea’s leading electric power, materials and energy conglomerate LS Group is seeking an initial public offering (IPO) next year with an estimated corporate value of 2 trillion won ($1.4 billion), investment banking industry sources in Seoul said on Monday.

Essex Solutions, wholly owned by Superior Essex Inc. (SPSX), the world’s top magnet wire provider under LS, plans to send requests for proposals to South Korean and foreign brokerage houses to select managers by early 2025 for the listing in either the US or Korea, according to the sources.

“Essex Solutions is planning to go public in the market that more highly estimates its value,” said one of the sources. “Its enterprise value is estimated at over 2 trillion won, given expectations of a recovery in the electric vehicle market.”

The company, formerly Essex Furukawa Magnet Wire, supplies magnet wire products for EV transaction motors and other components to major global EV manufacturers.

TO RAISE $200 MILLION THROUGH PRE-IPO

Founded in 2020, Essex Furukawa was a 61:39 joint venture between SPSX and Japan’s Furukawa Electric Co. SPSX took over Furukawa’s stake in the joint venture in March and changed its name to Essex Solutions.

The company aims to increase its EV magnet wire market share to 70% in North America and 50% in Europe in the next three to five years with $300 million in investment by 2028.

Essex Solutions separately seeks to raise $200 million before the planned listing through a rights offering to a consortium of the private equity (PE) unit of South Korea’s Mirae Asset Global Investments Co. and PE firm KCGI Co.

SPSX reported healthy earnings thanks to the subsidiary’s strong business. The parent reported a net profit of 100.5 billion won in the first half, up 789.3% from a year earlier, as sales rose 5.3% to 2.1 trillion won.

Write to Ik-Hwan Kim at lovepen@hankyung.com
 
Jongwoo Cheon edited this article.