This article was published on May 8, 2025, at 4:27 p.m. on the ChosunBiz MoneyMove site.
As the termination of the escrow for the defense corporation MNC Solution, owned by private equity firms Socius PE and Well to Sea Investment, approaches in six months, competition among advisory firms for the acquisition is heating up beneath the surface. Since it is a defense corporation, the acquirer is likely to be limited to domestic businesses, positioning domestic advisory firms favorably.
According to investment banking (IB) industry sources on the 8th, both domestic accounting firms and foreign consulting firms are reportedly making various proposals to Socius PE and Well to Sea Investment to take on the advisory for the sale of MNC Solution.
The quickest to act is the foreign consulting firm UBS. UBS previously provided advice during the 2020 sale of Doosan Bobcat to Socius PE and Well to Sea Investment, when Doosan Bobcat sold the heavy equipment hydraulic components specialist Motrol, leading to a high assessment of their understanding of the corporation. MNC Solution is a spin-off from the defense division of Motrol.
However, foreign consulting firms are in a somewhat disadvantageous position in the selection competition for the advisory of the sale of MNC Solution. Since MNC Solution is a defense corporation, prior approval from the Defense Acquisition Program Administration is required for the sale; therefore, only domestic companies can qualify as acquirers. As the Defense Acquisition Program Administration scrutinizes the source of funds from potential buyers, there is little possibility of foreign capital entering.
An IB industry source noted, "While UBS has the advantage of having worked together once, the main reason for using a foreign lead manager is largely to attract overseas buyers," adding, "If the acquisition candidates are limited to domestic firms, there would be little reason to use a foreign lead manager."
Currently, the largest shareholders of MNC Solution are Socius PE and Well to Sea Investment, which own about 74% of the equity. The mandatory holding period for the largest shareholders will end at the end of this year, marking one year since the company's listing, suggesting that an advisory firm will likely be selected before that.
MNC Solution was a business segment of Doosan Group but was physically divided during the group's restructuring in 2020. The following year, Socius PE and Well to Sea Investment acquired it for 453 billion won. The two firms separated MNC Solution into a defense parts enterprise and a hydraulic equipment enterprise in 2023. They left the defense parts business with MNC Solution and transferred the hydraulic equipment business to the newly established corporation Motrol.
Last year, the two firms recovered 242.1 billion won by reselling Motrol to Doosan Bobcat. They also liquidated 78 billion won from the listing of MNC Solution. The total dividends received amount to 63 billion won. The pre-tax mid-term recovery amount, after adding these up, stands at 383.1 billion won, recovering 80% of the invested principal. As of that day, the market capitalization of MNC Solution is 982.2 billion won, making the value of the owned equity roughly 725 billion won by simple calculation.