A race to buy a minority stake in AirFirst Co., an industrial gas business company, from South Korea’s leading private equity firm IMM Private Equity has drawn interest from many investors including foreign sovereign wealth funds and pension funds before the preliminary auction in the first quarter.

According to multiple sources from the investment bank industry on Thursday, IMM PE plans to send investment letters to potential bidders next week through its sales advisors Bank of America Merrill Lynch and Credit Suisse. It is selling its 30 percent stake in AirFirst.

While IMM PE has limited the candidates to foreign institutions, more than 15 investors including sovereign wealth funds, state pension funds, and private equity firms have expressed interest in the bid.

Market insiders estimate AirFirst to be valued at about 4 trillion won ($3.2 billion) and the value of the stake at above 1 trillion won.

AirFirst was launched in 2019 following IMM PE’s acquisition of a full stake in Linde Korea for 1.3 trillion won. The purchase came after the Fair Trade Commission ordered the sale of global industrial gas company Linde Korea after its merger with Praxair Inc.

Under the management of IMM PE, AirFirst has shown solid growth in earnings. The company’s sales jumped to 400.6 billion won and operating income 70.3 billion won in 2021 from 179.7 billion won and 34.4 billion won, respectively, in 2019.

Expectations are high that AirFirst business would gain momentum on an increase in gas orders following the construction of new factories by Samsung Electronics Co. This could raise its earnings before interest, tax, depreciation, and amortization (EBITDA) to up to 300 billion won from 100 billion won at the time of IMM PE acquisition.

By Kang Doo-soon, Oh Dae-seok, and Han Yubin

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