Smartphone material maker NexFlex draws bidders

NexFlex Co., South Korea's largest manufacturer of flexible copper clad laminates (FCCLs) used for smartphones, has drawn around half a dozen preliminary bidders, in a deal estimated at around 700 billion won ($580 million).

SkyLake Investment Co., a Seoul-based private equity firm, received letters of intent by March 31 from domestic companies and other private equity firms, according to people with knowledge of the matter on Friday.

Iljin Materials Co. is the only identified bidder.

FCCLs, composed of polyimide films and copper foils, are used for flexible printed circuit boards (PCBs), key components of smartphones and other tech gadgets.

Iljin Materials is a major supplier of copper foils used in PCBs, which connect chips to the circuit boards of electronic devices.

The sell-side is demanding around 700 billion won for a 100% stake in NexFlex, slightly above the bidder's estimations. SkyLake and the sale advisor KR & Partners will shortlist the candidates next week. 

NexFlex was set up in 2018 when SkyLake acquired the FCCL business from SK Innovation Co., It counts Samsung Electronics Co. and Apple Inc. as its clients.

The growing demand for high-performance and smaller mobile devices is expected to boost sales of FCCLs, which can bend into the designed shape.

NexFlex has developed its own polyimide films and introduced up-to-date manufacturing process using infrared rays to strengthen FCCLs.

Its 2021 sales nearly doubled to around 150 billion won, versus 80.4 billion won the year previous and compared with 69.2 billion won in 2019.

SkyLake's valuation reflects expectations that the prevalence of the 5G mobile network, which boasts faster speeds than 4G, will likely push NexFlex's sales further higher, led by FCCLs for 5G enabled smartphones, the sources said. 
 
SkyLake, set up in 2006, is headed by ex-Information and Communication Minister and Samsung Electronics Digital Media President Chin Dae-je.

Write to Chae-Yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article