SK’s cybersecurity unit sold to private equity fund in $1.5 billion deal

2023.03.02 12:16:02 | 2023.03.02 12:24:14

Vice Chairman Park Jung-ho of SK square [Photo by Joint Press Corps]이미지 확대

Vice Chairman Park Jung-ho of SK square [Photo by Joint Press Corps]

SK shieldus Co., the cybersecurity arm of South Korea’s telecommunications giant SK telecom Co., was sold to overseas private equity fund operated by Sweden’s largest conglomerate Wallenberg Group for about 2 trillion won ($1.5 billion).

EQT Partners will acquire part of SK square Co.’s stake and the entire 36.9 percent held by the Macquarie Asset Management Consortium. It will also obtain additional new shares to become the largest shareholder of SK Shieldus with a 68 percent stake. SK Square will remain as the second-largest shareholder with a 32 percent stake worth about 1 trillion won.

“The acquisition of SK shieldus’ stake by EQT Infrastructure under EQT Partners, a Wallenberg Group investment company, was unanimously approved,” Vice Chairman Park Jung-ho of SK square, the investment arm of SK telecom, said during a press conference held in Barcelona, Spain, on Tuesday. Currently, SK shieldus is the second-largest company in the domestic security service market after S-1 Corp. and the number one company in cybersecurity.

SK square plans to seek approvals from Korea’s Fair Trade Commission and various government for the sale in the third quarter.

In 2018, a consortium of SK telecom and Macquarie Infrastructure Asset Management acquired a 100-percent stake in ADT Caps, which later changed its name to SK shieldus, from the Carlyle Group for 2.97 trillion won. Later, ADT Caps and SK infosec Co., the top company in the cybersecurity industry in 2021, merged to create the current SK shieldus.

SK shieldus became a subsidiary of SK square in 2021 as SK telecom was divided into SK telecom, the business division, and SK square, the investment division.

Last year, SK square attempted to launch an initial public offering for SK shieldus, citing that it is a “comprehensive security service company” that encompasses rapidly growing, convergence security and safety and care service. However, the process was suspended in May as the IPO market was shrinking amid macroeconomic uncertainties and concerns that the offerings were overpriced. Since then, SK square executives, including Park, have taken steps to recover investments by seeking to sell SK shieldus to overseas private equity funds.

This move seems to be drawing mixed reactions from the domestic security service industry. There are positive views that this will help SK Shieldus expand overseas, but there are also concerns that a change in ownership again in four years could deteriorate the company’s competitiveness.

In a related development, Park stressed that SK square and EQT will jointly manage SK shieldus. He added that the newly secured 864.6 billion won through this deal will be used for new projects in SK shieldus. First of all, SK square plans to use 200 billion won worth of new shares as financial resources for new projects targeting overseas unmanned store markets and upgrading artificial intelligence-based security services, among others.

EQT already has a portfolio of security companies in North America and Europe, including Sweden’s largest security company Securitas AB, Swedish pest control company Anticimex, Israeli information security company CYE and Swiss security company Open Systems AG.

By Woo Soo-min, Ko Min-suh, and Yoon Yeon-hae

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