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Waste management

Keppel Infrastructure and MBK join bid for Korean sewage treatment firm

Jun 08, 2020 (Gmt+09:00)

Singapore’s Keppel Infrastructure and MBK Partners are among 15-odd preliminary bidders for South Korea’s largest wastewater treatment company EMC Holdings Co. Ltd. worth an estimated 1.2 trillion won ($1 billion).

More than 15 financial investors have submitted letters of intent by the June 4 deadline to buy the waste management company from Affirma Capital, formerly known as Standard Chartered PE, according to investment banking sources.

The company up for sale is different from industrial and medical waste treatment firm ESG Co. Ltd. for which KKR & Co. has been preparing to join the bid, in a deal worth about 800 billion won.

Keppel Infrastructure made the non-binding bid as its parent group Keppel Corp. pointed out energy and environment as one of its four key areas to focus on and said it would pursue strategic mergers and acquisitions for growth, in an annual general meeting on June 2.

Affirma Capital, spun off from Standard Chartered last year, has put 100% of the unlisted Korean company on the market, four years after it secured the management rights in 2016.

The private equity firm had spent 120 billion won in buying a wastewater treatment company from a South Korean conglomerate in two stages between 2009 and 2016 and made bolt-on acquisitions of six waste disposal firms in the country for a combined 256 billion won since then.

EMC Holdings is a combination of the seven Korean entities and runs 2,000-odd sewage and wastewater treatment facilities across the country. It also owns four waste disposal facilities and a garbage incineration plant.

Affirma funded those acquisitions with reserved capital of the Korean firms and used debt financing, without raising an additional fund.

Revenues at EMC reached 380.8 billion won in 2019, with EBITDA of 82.2 billion won.

Its estimated price tag of 1.2 trillion won is equivalent to 12 times forecast EBITDA. A series of recent transactions for Korean waste treatment companies applied EBITDA multiples of 12 to 14.

If the sale goes through, Affirma Capital will likely achieve a return of three times its original investment.

The preliminary bidders for EMC Holdings will be shortlisted in the coming weeks, with the final round of bidding due for later next month, the sources said.


MBK participated in the competition for EMC, just after pulling out of race for two waste management firms sold by Macquarie Korea Opportunities Management Ltd.

Last week, Macquarie signed a definitive agreement to sell its 59% stake in Korea Environment Technology Co. Ltd. (Koentec), along with the 100% stake in Saehan Environment Co. Ltd. to a consortium of Seoul-based E&F Private Equity and a domestic construction materials company.

French water and waste management utility Veolia was the only foreign participant in the final round of bidding for Koentec and Saehan, which were estimated to fetch over 500 billion won, or more than 10 times EBITDA.

Bidders for South Korean waste management firms are expecting to improve the value of the target companies through add-on acquisitions, given that the domestic market is fragmented with a number of small players.

E&F Private Equity, which bought the two Korean waste disposal providers from Macquarie last week, also joined the bid for Affirma Capital’s EMC Holdings.

Citiglobal Markets and Standard Chartered are handling the sale.

Write to Chaeyeon Kim and Dong-hun Lee at

Yeonhee Kim edited this article

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