South Korea’s stainless-steel manufacturer Daiyang Metal with a market cap of around 140 billion won ($108.42 million) will buy Youngpoong Paper, a manufacturer of paper products, at about 130 billion won to diversify its business portfolio.

According to the Financial Supervisory Service (FSS) disclosure on Tuesday, Youngpoong Paper’s largest shareholder Q Capital Partners signed a deal with Daiyang Metal to sell its 50.55-percent stake (11,221,730 shares) in Youngpoong Paper including management rights for 128.9 billion won.

Daiyang Metal shares were up 6.53 percent to 4,650 won in Wednesday’s early trading.

Daiyang Metal, founded in 1973, manufactures high-performing thin stainless-steel coils through advanced rolling and heat-treatment technologies. It supplies its stainless coils to electronic companies and auto parts makers. The company, listed on the Kospi market in 1994, holds 141.2 billion won in market cap as of Tuesday.

Daiyang Metal’s cash holdings including short-term financial instruments amounted to 25.2 billion won as of the first quarter of the year and it has formed a consortium with partners to sign the deal, according to investment banking sources.

Q Capital Partners was cashing out of Youngpoong Paper in doubled profit for its acquisition in 2015. It bought the 55-percent stake of the paper manufacturer for 65 billion won through a special purpose company.

By Kang Woo-seok and Jenny Lee

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