SKC Co., chemical and tech material producing unit of South Korean conglomerate SK Group, will buy the country’s leading battery copper foil and flexible copper clad laminate (FCCL) maker KCF Technologies Co. (KCFT) for 1.2 trillion won ($1.1 billion).
SKC in a disclosure on Thursday said its board decided to buy a full stake in the homegrown copper foil and FCCL maker KCFT at 1.2 trillion won from U.S.-based investment firm Kohlberg Kravis Roberts (KKR) & Co. The two parties signed on the stock purchasing agreement, the company said.
SKC shares on Thursday closed 2.7 percent higher at 36,150 won in Seoul trading.
SKC now is planning to speed up the remaining process like due diligence required to have the company as its subsidiary.
KCFT, based in Korea, manufactures copper foils, a core part of a lithium-ion battery for electric vehicles and mobile devices, as well as FCCL in displays for TVs and smartphones. It was a part of LS Mtron Ltd, industrial machinery making unit of Korea’s LS Group, but was sold to KKR & Co. at 300 billion won in 2017.
KCFT is the world’s sole producer of industry’s thinnest 5 micrometer-copper foil used in lithium-ion batteries. Nearly 80 percent of its sales come from the battery copper foils supplied to global major batter makers including Korea’s LG Chem and Samsung SDI as well as China’s CATL and BYD.
The company reported 80 billion won in earnings before interest, taxes, depreciation, and amortization (EBITDA) last year. SK Group has been making big expansion for battery unit SK Innovation.
Based on much improvement in corporate value, KKR has been actively seeking ways to cash in on its investment since early this year. It initially considered an initial public offering (IPO) or pre-IPO.
Instead of making partial equity investment, SK Group decided to go out for the entire company.
KCF Technologies Co.`s battery copper foil manufacturing plant.
KCFT is expected to play a key role in driving the growth of SKC’s mobility business, market analysts said. Since 2017, the company has been reorganizing its business portfolio focusing on mobility, semiconductors and environmentally friendly businesses.
With the acquisition of KCFT, SKC also has moved a step closer to creating the vertical integration of its battery business, which has been the company’s new goal, market analysts said.
SKC in 2018 reported an operating profit of 201.1 billion won on sales of 2.8 trillion won. It has enough cash to expand its business portfolio.
By Han Woo-ram and Lee Ha-yeon
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