World’s No.1 magnet wire maker SPSX mulls Korean IPO

Superior Essex Inc. (SPSX), the world’s top magnet wire provider under South Korea’s LS Group, is mulling an initial public offering in its Korean parent’s home country more than 15 years after it left the US Nasdaq market.

According to sources in the investment banking industry on Wednesday, the Atlanta-based cable supplier is looking into an option to list on Korea’s main Kospi bourse.

The US largest cable manufacturer was acquired by Korea’s leading electric power, materials and energy conglomerate LS in 2008 in a deal in which the latter agreed to pay shareholders of then-Nasdaq-listed Superior Essex $45.00 per share in cash, a 50% premium over the year-to-date-average closing price of its common stock.

After the takeover, Superior Essex was delisted from the US market but had pursued a return to the Nasdaq market until last year.

SOUR INVESTOR SENTIMENT IN THE US

But IPO market conditions for cable companies in the US have turned negative, with the country’s leading telecom stock AT&T Inc. inching up a mere 5.4% over the last year. Requirements to go public in the US market are also more complicated than those in the Korean market.

The Korean IPO market, however, has been on the recovery track since late last year, unleashing more listing opportunities.

LS Group’s energy storage device-making subsidiary LS Materials Co. has tripled since its debut on Korea’s junior Kosdaq market in December last year, while HD Hyundai Marine Solution Co. valued at 3.78 trillion won ($2.8 billion) made a blockbuster debut earlier this month in the main Kospi bourse.  

Considering that LS Corp.’s Chairman Koo Ja-eun said at Korea’s leading battery exhibition InteBattery 2024 in March that the group was seeking to list one or two more affiliates between LS E-Link and LS MnM IPOs, the US unit is floated as a strong candidate to go public before LS MnM, said sources.

LS Corp. is LS Group's holding company controlling Korea’s top wire and cable producer LS Cable & System Ltd., LS Electric Co. and global leading smelter LS MnM Inc. and LS Mtron Co. 

DRAG-ALONG RIGHTS

Superior Essex should complete its IPO by 2026 because LS raised funds from Korean private equity firm SKS Credit Co. in August last year in a pre-IPO deal giving the investor drag-along rights, which means they can force the sale of Superior Essex shares to a third party if the US unit fails to go public until 2026.

Against this backdrop, brokerage firms are in talks with LS Group to tap Superior Essex’s IPO in Korea, said an official from the Korean securities industry.

Superior Essex is the world’s largest producer of magnet wire and a leader in the North American communications cable market.

In March, it joined the US government’s 55 trillion won project to build high-speed communication networks.

It has also jumped into the EV motor magnet wire market after fully taking over a minority interest held by Furukawa Electric in the Essex Furukawa Magnet Wire joint venture the same month.

Superior Essex reported $1.5 billion in sales in 2023.

Write to Jeong-Cheol Bae at bjc@hankyung.com


Sookyung Seo edited this article.