An exterior view of a factory of Taihan Electric Wire in Dangjin, South Chungcheong Province. (Taihan Electric Wire)
IMM Private Equity has agreed to sell a 40 percent stake in Taihan Electric Wire to Hoban E&C for 251.8 billion won ($222.2 million) to exit from the industrial wire maker, a filing showed Monday.
This will mark the first exit announced this year by South Korea’s third-largest private equity firm that has $5.4 billion-worth of assets under management.
The deal involving Taihan’s 342.6 million common shares is scheduled to close on May 31. Hoban E&C will become Taihan’s largest shareholder after the transaction.
IMM PE said in a statement that its buyout strategy allowed the portfolio company to raise its global profile in terms of extra high voltage cable manufacturing, capitalize on new businesses such as high voltage direct current systems and underground cables, while unloading Taihan’s noncore businesses to improve its balance sheet.
The private equity firm added that it chose to ink the deal with Hoban E&C as the prospective buyer’s financial capacity boded well for Taihan’s global presence.
The news comes after IMM PE sought to turn around the debt-saddled company since a takeover in September 2015. It acquired some 600 million common shares, or a 75 percent stake, for 300 billion won in a public share offering.
Before the latest announcement, IMM PE had already cashed in a combined 270.2 billion won, by divesting 257.4 million common shares for three years, from May 2018 to February 2021.
IMM PE was founded in 2006 and has since been dedicated to buyout and growth capital strategies. Its portfolio ranges from travel agency HanaTour Service to fashion e-commerce platform W Concept Korea and cosmetics firm Able C&C.
By Son Ji-hyoung (email@example.com