LS Group's US affiliate SPSX to raise $150 mn in pre-IPO

LS Group’s US cable affiliate Superior Essex (SPSX) plans to raise $150 million (200 billion won) via a South Korean private equity fund (PEF) in a pre-initial public offering (IPO) for its subsidiary SEABL, the company announced on Friday.

The deal, anticipated to be completed by May 23, includes an agreement to enter a primary contract with SKS Credit, SK Securities' private equity fund manager. The arrangement also involves several institutional investors, including banks.

The pre-IPO valuation of SEABL, a telecommunications cable manufacturer, is about $750 million (1 trillion won). The raised funds will be used for debt repayment, business expansion and to bolster SEABL's growth.

SPSX was acquired by LS Group in 2008. It saw sales of $30.2 billion (4 trillion won) in 2022, a 7% increase year over year. This company is considering listing SEABL on either the New York Stock Exchange or South Korean stock market.

SPEX ranked first in the world in wire winding and fourth in North America's telecommunications line sector, sees significant growth potential in the telecom cable business, driven by the rising demand for 5G private networks across various sectors including smart factories, education and healthcare, particularly in Europe and North America.

LS Group’s “Vision 2030” strategy, which involves a plan to become a 50-trillion-won group by 2030, depends significantly on North America.

As part of its expansion strategy, LS Cable & System Asia, a subsidiary of LS Cable, is stepping up exports of unshielded twisted pair (UTP) cables, a type of telecom cable. Concurrently, LS Electric is expanding its business by supplying essential power solutions for the construction of battery factories in the US.

Write to Ik-Hwan Kim at lovepen@hankyung.com