This article appeared on the ChosunBiz MoneyMove site at 3:12 p.m. on March 27, 2025.
The acquisition race for SK Eco Plant's environmental division, considered to be a "big deal" valued at up to 2 trillion won, will include domestic private equity fund (PEF) operator STIC Investments. Competing against global PEF operators such as KKR and Carlyle, the aim is to secure a stable investment opportunity with an infrastructure nature.
According to the investment banking (IB) industry on the 27th, STIC Investments recently expressed its intention to acquire SK Eco Plant's environmental division and has begun negotiations. SK Eco Plant, which chose a limited competitive bidding method for the sale of the environmental division, had previously only considered KKR and Carlyle as negotiation targets.
SK Eco Plant has put up for sale a 100% stake in its mid-holding company, waste landfill operator Renewon, and 75% of its equity in water treatment and waste company Renewus. This means that the entire environmental division of SK Eco Plant, excluding the IT waste company SK TESS, is up for sale.
With SK Group pushing for the sale, SK is reportedly hoping for a sale price of up to 2 trillion won. SK Eco Plant has continued large-scale mergers and acquisitions (M&A) since 2020 under the banner of expanding its eco-friendly business, but has faced deteriorating financial structure due to interest burdens.
STIC Investments is analyzed to have chosen SK Eco Plant's environmental division as a stable investment opportunity. This is because the waste landfill and incineration, and water treatment businesses have a nature that allows for consistent cash generation. Recently, it also began investing in the waste landfill company Ecosolution using its credit department.
In a market where solid investment assets with a potential for large-scale investments are scarce, it is also viewed positively that large-scale investments have already been finalized, allowing dry powder to be exhausted. STIC Investments’ dry powder was found to have exceeded 2 trillion won in the first half of last year.
The market is even showing expectations that the environmental waste market will transition into a boom. Landfills have profitability rates of 70-90% based on earnings before interest, taxes, depreciation, and amortization (EBITDA), and were once referred to as golden geese, but have experienced price declines due to increased competition. However, recently, the stabilization of supply and demand has started to push up processing prices.
The acquisition battle for SK Eco Plant's environmental division will take place among KKR, Carlyle, and STIC Investments. KKR is regarded as the PEF with the highest understanding of the domestic environmental industry and has been listed as a strong candidate for acquisition early on, while Carlyle is also expanding its investment in domestic environmental firms.
STIC Investments has become the only local PEF seeking to acquire Renewon and Renewus. Earlier, there were observations that the domestic PEF operator IMM Private Equity, which became the new owner of Ecobit, might also participate, but it has been reported that they would not convey their intention to acquire to SK.