Samsung SDI supplier Jaewon seeks about $280 mn in pre-IPO

South Korean mid-sized petrochemical company Jaewon Industrial Co. is looking to attract pre-IPO investment, according to investment banking sources on Oct. 18.

The company sent an investment teaser to some Korean and overseas private equity firms last week, sources said.

Jaewon is aiming to draw 300 billion-400 billion won ($210.2 million-$280.2 million) via pre-IPO, working with accounting firm Samil PwC for the financing round. The petrochemical company’s value is estimated at nearly 2 trillion won.

Aiming to go public in 2023, the company has selected Samsung Securities Co. as lead manager for the IPO.

Founder Shim Jang-sup is the largest shareholder with a 25.54% stake, followed by his eldest son and current CEO Shim Jae-won with 17.46%. Their family holds the remaining shares.

Established in 1986, the company manufactures high-purity electronic grade solvents for liquid crystal displays (LCDs) and semiconductors. It also operates tank terminals in Yeosu, South Jeolla Province for chemicals trading.

Last year, it became the first Korean company to commercialize propylene glycol methyl ether acetate (PGMEA), a key material for the extreme ultraviolet (EUV) process that enables finer and denser semiconductor patterns. Jaewon supplies the material to Samsung SDI Co., LG Display Co. and SK Hynix Inc.

Jaewon received 270 billion won in investment from state-run Korea Development Bank in June to accelerate its secondary battery materials business, including conductive polymers.

The company, with battery maker Samsung SDI Co., has entered the battery materials markets in China, Malaysia and Hungary.

Jaewon has shown stable earnings in recent years. It achieved 238.6 billion won in revenue and 15.1 billion won in operating profit last year. In 2020, it posted 208.7 billion won in revenue and 11.2 billion won in operating profit.

The secondary battery sector in Korea is garnering investor attention despite interest rate hikes and a slowdown in the stock market. 

Lithium-ion battery maker Rutejade received 80 billion won in investment from Korean PE firm Ace Equity Partners via pre-IPO funding in January. Battery recycling firm Sungeel Hitech, separator maker WCP and electrode manufacturer Top Material have been listed so far this year.   

Write to Chae-Yeon Kim and Jun-Ho Cha at why29@hankyung.com
Jihyun Kim edited this article.