DTR Automotive, a Korean manufacturer of batteries, tires, and auto parts, will become a new owner of Doosan Machine Tools as it has agreed to acquire the company from MBK Partners for 2.4 trillion won ($2.05 billion).

MBK Partners, the largest private equity fund in Northeast Asia, signed a contract to sell its 100 percent stake in Doosan Machine Tools to DTR Automotive, according to industry sources on Friday.

Sources said DTR Automotive was favored over local apparel manufacturer Sae-A in a final closed bidding round. Sae-A joined the bid to secure a new growth engine but pulled out possibly due to low synergy with its current business.

DTR Automotive was created in late 2017 from a demerger of Dongah Tire & Rubber. The biggest shareholder of Dongah Tire & Rubber is its founder and chairman Kim Man-soo with 28.61 percent, followed by his son Kim Sang-heon with 12.75 percent. DTR Automotive’s cash and cash equivalent assets amounted to about 190 billion won as of the end of January, while Dongah Tire & Rubber about 40 billion won.

Based in Seoul, Doosan Machine Tools is the country’s leading manufacturer of turning centers, machining centers and other precision machine tools. In late 2016, MBK Partners acquired the entire stake in the company from Doosan Infracore for 1.13 trillion won. After the acquisition, Doosan Machine Tools delivered solid financial results. Earnings jumped five-fold and sales nearly doubled over the following three years.

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

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]