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SK Group to pick up KCF from KKR
Posted on Thursday, 13 June 2019 09:07
Private equity group KKR & Co has agreed to sell South Korean copper foils and flexible copper clad laminates group KCF Technologies to SKC, an affiliate of SK Global, for KRW 1,200 billion (USD 1.01 billion).
The buyout firm paid KRW 300.00 billion for the target back in 2017 through its Asian Fund.
KCF is billed as a global leading producer of copper products, predominantly used in li-ion batteries for electric vehicle applications.
The company has seen its capacity double while under private equity ownership through the construction of new factories and expansions in overseas markets.
KKR also assisted KCF and its management team in setting up core functions to operate as an independent business, securing long-term supply contracts and making key senior appointments.
Closing remains subject to regulatory consents and approvals, although the final date was not disclosed.
Car manufacturers have been expanding into electric vehicles for some time and with the target supplying copper batteries to operate these automobiles, it makes an attractive target at a critical time for the sector.
Deals targeting copper rolling, drawing, extruding and alloying companies are few and far between with just 18 transactions signed off globally in 2019 to date, according to Zephyr, the M&A database published by Bureau van Dijk.
The largest of these involves Zhejiang Hailiang buying KME’s European brass rods business, which includes assets in Germany, Italy, Spain and France, for USD 285.75 million.
Three Chinese companies followed the top deal by value: Ningbo Boway Alloy Material, Zhejiang Tony Electronic and Jiangdong Electronic Material.
Interestingly, there was one other deal to feature a copper rolling manufacturer in South Korea as Kukil Metal raised KRW 7.61 billion through a sale of 960,000 treasury shares through off-hours block trading in February.
© Zephus Ltd