Socius-Well to Sea consortium to buy Doosan Corporation Mottrol for $381 mn

Doosan Group is selling its hydraulic components manufacturing arm to a consortium of two local private equity investment firms -- Socius Advisors and Well to Sea Investment Co. -- for 453 billion won ($381 million).

The debt-laden group approved the deal at a board meeting, during which they endorsed a package of affiliate asset sales to raise capital in return for a state bailout.

According to Doosan Co.'s regulatory filing on September 4, the group will spin off Doosan Corporation Mottrol, transferring ownership of its entire stake to the Socius-Well to Sea consortium.

The deal is subject to approval from the Ministry of Trade, Industry and Energy and the Fair Trade Commission, as the company makes hydraulic components for defense systems. Doosan expects to close the deal, managed by Credit Suisse, by December 17 of this year.

The Socius-Well to Sea consortium outbid contenders such as Morgan Stanley Private Equity, China’s heavy machinery giant XCMG and another Korean consortium of NH Investment & Securities PE and Opus PE.

While negotiations were under way to sell Doosan Corporation Mottrol, its unionized workers staged a protest to oppose the sale to a foreign entity in fears that it would lead to massive job cuts.

The Socius-Well to Sea consortium is no stranger to the Doosan Group as they bought the group’s engine-making unit Doosan Engine Co. for 82.2 billion won in 2018.

Mottrol, which is in charge of making oil pressure machines and military equipment, is one of the Doosan Group’s core business divisions. The company earned 38.9 billion in operating profit on revenue of 562.7 billion won in 2019. Its EBITDA, which shows the company’s current operating profitability, topped 50 billion won last year.

Write to Chae-Yeon Kim at why29@hankyung.com