This article was published on Jan. 6, 2025, at 2:45 p.m. on the CHOSUNBIZ Money Move (MM) site.
Sweden's Wallenberg family's private equity fund operator EQT Partners has acquired a total of 17 corporations, including the domestic recycling platform company KJ Environment, while KB Securities and KB Kookmin Bank's acquisition finance sell-down seems to be a success.
On the 6th, according to the investment banking (IB) industry, KB Securities and KB Kookmin Bank, the lead arrangers of the KJ Environment acquisition finance, have entered the final stages of the lead investor recruitment process. They are expected to complete the sell-down within this month. It is reported that many financial institutions have participated, pooling more funds than originally targeted.
EQT acquired 17 companies, including KJ Environment, a waste plastic recycling corporation, from Genesis Private Equity (PE) for 1.1 trillion won last November. KJ Environment serves as the holding company, with 16 subsidiaries incorporated under it. EQT has contributed capital through a blind fund and raised about 440 billion won through acquisition finance. The interest rate for the acquisition finance was formed in the low 6% range.
Initially, there were predictions that the acquisition finance sell-down would not be successful due to the high valuation, but ultimately, many financial institutions flocked to it, resulting in overbooking. The waste treatment industry requires government approval, making entry barriers high, and due to steady demand for waste, it is considered stable.
An IB industry official noted, "Although the absolute price is high, the waste treatment industry has a clear advantage of good cash flow," adding, "Many acquisition finances fell through last year, and among the acquisition finance deals currently on the market, there aren't many attractive cases, which highlights its relative appeal."
Through this acquisition finance, the relationship between KB Securities and EQT is expected to strengthen further. KB Securities previously solely arranged an acquisition finance deal worth over 2.3 trillion won when EQT acquired SK Shieldus from SK Square in 2023. Yang Hyun-jong, who led the transaction at the time, has been promoted to head of IB2 this year.
Meanwhile, Genesis PE has recovered over 500 billion won through this deal. This was achieved by aggregating small recycling companies and modernizing aging treatment facilities to enhance business efficiency. Since 2020, Genesis PE has gradually acquired a total of 17 companies, including KJ Environment, for about 400 billion to 500 billion won.