BlackRock buys $860 mn stake in S.Korean gas supplier

Global asset manager BlackRock has bought a 30% stake in South Korea’s industrial gas supplier AirFirst Co. for 1.11 trillion won ($860 million) via its fourth infrastructure fund, according to people with knowledge of the matter.

BlackRock on Thursday signed a definitive agreement to purchase the minority stake from Seoul-based IMM Private Equity, valuing the unlisted company at 3.7 trillion won.

IMM will remain the largest shareholder in AirFirst with a 70% stake.

Its enterprise value includes a rights offering to be issued. It is three times more than its previous valuation in 2019, when IMM PE acquired 100% of the company from Germany-based Linde.

To execute the deal, BlackRock tapped its fourth infrastructure fund, BlackRock Global Infrastructure Fund IV. The fund raised $4.5 billion at its first close in December 2022, targeting energy and power infrastructure assets.

The purchase price includes 60 billion won in new shares to be shouldered by BlackRock. IMM PE will chip in another 140 billion won to buy AirFirst's new shares.

The proceeds will be used to build AirFirst's new facility. The rights offering will not change the 30:70 ownership between BlackRock and IMM PE.

Under the agreement, BlackRock may exercise a tag-along right to divest from AirFirst when IMM PE offloads its shares.

BlackRock competed with three other shortlisted bidders — KKR & Co., Canada-based Brookfield and CVC Capital — to buy the AirFirst shares up for grabs.

For IMM PE, the minority stake sale generated a 39% internal rate of return. In 2019, it acquired the South Korean assets of Germany-based Linde for 1.3 trillion won and rebranded the company as AirFirst.

In 2022, the gas supplier posted a 50% year-on-year jump in consolidated sales to 602.2 billion won. Operating profit reached 83.4 billion won, up 20% from a year earlier.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com
Yeonhee Kim edited this article