South Korea’s Corea Autoparts Producing Corporation (CAP), a manufacturer of vehicle-use wiper blades and related auto parts, is up for grabs in a competitive auction that is expected to draw dozens of bidders.
On Friday, co-sales advisors Hana Financial Investment Co. and Korea Investment & Securities Co. announced that they will receive letters of intent from potential buyers interested in acquiring a full stake in CAP until September 27. CAP is fully owned by IMM Private Equity (PE), one of the country’s top private equity firms.
The latest bid comes 7 years after IMM PE invested 60 billion won ($53.5 million) in the auto parts manufacturer in 2010 through a fund and it is now seeking to recoup them.
Last year, CAP raised 10.4 billion won in operating income on sales of 88.8 billion won. The company posted 13.1 billion won in earnings before interest, tax, depreciation and amortization (EBITDA) last year. Industry sources project the sales price would reach about 80 billion won.
Since 2015, IMM PE has been putting out efforts to recollect investment funds through various options such as via initial public offering (IPO) or a merger with a special purpose acquisition company. They did not work out in the end as back then, a company with a PEF manager as its major shareholder was regulated to seek an IPO.
Sources note that IMM PE has decided to go with the option of selling management rights to speed up recouping its investment. About 20 potential candidates are reportedly interested in buying CAP. The auction is projected to be completed by the end of this year at the earliest.
By Kang Doo-soon and Han Woo-ram
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