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Private equity

PEFs claim one-third of S.Korea's M&A deals in H1

In terms of value, PEFs make up almost half of first-half M&A transactions

By Jul 27, 2021 (Gmt+09:00)

(Source: Getty Images Bank)
(Source: Getty Images Bank)

Private equity firms (PEFs) have participated in one in every three buyout deals involving South Korean companies in the first six months of the year, a study of Market Insight shows.

South Korean companies, some of which were owned by PEFs, were involved in 135 M&A transactions in the first half. Of the total, PEF-involved deals amounted to 47, making up 34.8%. 

PEFs worked on the buy-side for 34 deals, while representing the sell-side for 18 transactions. Five of them involved them for both sides.

In terms of value, transactions participated by PEFs accounted for 48.1% of the sum, indicating their growing clout in the country's M&A market.

The data is based on announced deals, including minority stake purchases made through consortiums. But transactions of real estate and infrastructure, inter-affiliate trade and joint venture deals were excluded. It was compiled by The Korea Economic Daily’s capital market news outlet Market Insight.

The biggest PEF-involved deal in the first half was the $1.7 billion purchase of TaylorMade Golf Co., one of the world's top three golf equipment makers, by Seoul-based Centroid Investment Partners.

Some of the buyout transactions were conducted by foreign PEFs with no track record in South Korea. China-based Wise Road Capital acquired Korean chipmaker Magnachip Semiconductor Corp. for $1.4 billion. Hong Kong-based FountainVest Partners bought a majority stake in CJ Rokin Logistics from CJ Logistics Co. for 733.8 billion won.

Further, PEFs have expanded their presence in the M&A market in relation to South Korean business groups' business restructuring. KDB Investment, part of the state-run Korea Development Bank, acquired Doosan Infracore Co. jointly with Hyundai Heavy Industries Holdings Co. for 850 billion won.

Opus Private Equity and NH Private Equity joined in the 325.7 billion won purchase of Hanjin Heavy Industries & Construction Co., led by Dongbu Corp. Seoul-based KH Investment teamed up with Korean bad asset management firm Uamco to buy STX Offshore & Shipbuilding Co. for 250 billion won.

Back in 2019 and 2020, PEFs participated in 31.1% and 35.1% of domestic M&A deals, respectively.

Write to Sang-eun Lucia Lee at selee@hankyung.com

Yeonhee Kim edited this article.

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