Korea’s Cactus PE to buy stake in Kosdaq-listed EV parts firm

South Korea’s Cactus Private Equity is set to acquire a stake in YM Tech Co., a Kosdaq-listed electric vehicle (EV) parts maker, for nearly 200 billion won ($139.5 million), as it bets on the long-term growth of the global EV market, investment banking industry sources said on Wednesday.

Cactus sought to buy a 47.95% stake in YM Tech, including the 40.6% stake held by its president and largest shareholder Kim Hong Gi, and the 7.35% of a vice president, according to the sources.

The private equity firm is set to complete project funding for the deal as early as next month and sign a stock purchase agreement.

YM Tech’s stock ended up 7.6% on Tuesday at 12,050 won after surging to 14,290 won, its highest level since August 2024.

The company’s market capitalization has hovered around 120 billion won over the past three months. Cactus is known to have agreed to pay a premium of 50% of the market cap, according to the sources.

EV RECOVERY

Cactus attracted investors easily given that major limited partners valued YM Tech’s growth potential, the sources said.

YM Tech manufactures EV relays, essential parts of an eco-friendly car that sit between the battery and the inverter. It also produces relays for other applications such as energy storage systems (ESS) and uninterruptible power supplies (UPS).

The EV relay sector, which has been under pressure from the prolonged slowdown in the global EV market, is expected to regain momentum once the clean car industry recovers, according to the sources.

Through the acquisition, Cactus is expected to seek synergy with KG Mobility Corp., a Korean carmaker specializing in sport utility vehicles, the sources said.

The private equity firm joined hands with KG Group as a financial investor when the Korean chemicals-to-steel conglomerate took over the maker of the Torres SUV in 2022.

Write to Da Eun Choi at max@hankyung.com
 
Jongwoo Cheon edited this article.