SK TI, Eugene PE picked as preferred bidder to buy Daekyung O&T

2023.09.19 14:59:01 | 2023.09.19 15:31:09

[Courtesy of SK TI]이미지 확대

[Courtesy of SK TI]

South Korea’s SK trading international Co. (SK TI) under SK innovation Co., and Eugene Private Equity (Eugene PE) is set to acquire Daekyung Oil & Transportation Co. (Daekyung O&T), a leading manufacturer of vegetable and animal oil fats.

According to sources on Monday, STIC Investments, the owner of Daekyung O&T, has chosen SK TI and Eugene PE as the preferred bidder for Daekyung O&T.

The deal encompasses a 100 percent stake in Daekyung O&T, with STIC Investments, which holds a 70 percent stake as of the end of last year, and related parties as the sellers.

Both parties have agreed on a sales price of about 500 billion won ($378 million). The stock purchase agreement (SPA), under the supervision of Bank of America Securities, is expected to be finalized later this month.

Eugene PE is expected to provide 60 percent of the deal amount, with SK TI shouldering the remaining portion. Eugene PE is reportedly acting as the lead arranger for the acquisition financing and is coordinating when to sign a definitive agreement to align with SK’s board meeting schedule.

The deal has generated significant interest among potential buyers in the domestic M&A market. Apart from the SK TI-Eugene PE consortium, IMM Investment and Mirae Asset Venture Investment had expressed their intention to join the bid. In March of last year, the selling party pulled out of the deal once.

Eugene PE is expected to utilize its Green Initiative Fund No. 2, primarily focused on environmentally friendly investments, for the transaction. The fund manager anticipates increasing demand for sustainable energy sources worldwide as environmental, social, and governance (ESG) requirements continue to strengthen.

By Kang Doo-soon, Park Chang-young, and Minu Kim

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