KKR buys $386 mn stake in Korean sewage disposal firm

KKR & Co. has purchased a combined 440.8 billion won ($386 million) worth of shares in TSK Corp., a leading South Korean sewage and wastewater treatment firm, from three Korean companies, following a 875 billion won deal to buy two other Korean waste management companies in August.

With the investment, the US private equity giant will own a combined 37.4% stake in TSK Corp., becoming its second-largest shareholder, according to regulatory filings by each of the three Korean companies on Oct. 19.

Under the latest deal, KKR is purchasing 16.7% of TSK from SK Engineering & Construction Co., a 16.5% stake from synthetic fabrics maker Huvis Corp. and 4.2% from SK Discovery Co. Taeyoung Engineering & Construction Co. is the largest shareholder of TKS Corp. with a 62.61% stake.

The deal involved three companies as SK Engineering exercised its drag-along rights under which the other two stakeholders are obliged to sell their stake. The companies said in the filings they are selling their stake as part of efforts to offload non-core assets.

SK Engineering sold its stake in TSK Corp. to secure funds needed to buy EMC Holdings, South Korea’s No.1 waste management company, estimated at 1 trillion won.

With the stake purchase of TSK Corp., KKR is further expanding its presence in Korea’s waste management market. In August, it signed a 875 billion won deal with Hong Kong-based Anchor Equity Partners to buy two Korean companies – 100% of ESG Co. Ltd., a medical waste treatment firm, and 77.8% of industrial waste management firm ESG Cheongwon Co.

By Ri-Ahn Kim

knra@hankyung.com

Yeonhee Kim edited this article.