Hansol Group is strengthening its semiconductor value chain, centered on affiliate Hansol Technics, as the sector enters a super-boom. Hansol Technics plans to acquire Wil Technology, a semiconductor inspection equipment company in which parent Hansol Holdings holds equity, and Hansol Holdings moved to support the acquisition funding as it transfers its equity.
On the 13th, shares jumped to the daily limit on news that Hansol Technics will expand its business portfolio around semiconductors. However, some noted that Hansol Technics' funding burden is growing, as the acquisition will be financed with external borrowing and the listing prospects for Hansol Oriontech, acquired last year, have dimmed.
Hansol Technics said on the 13th it will acquire 83.4% equity in Wil Technology for 177.2 billion won. The 15.7 billion won down payment has already been made, and the remaining 161.5 billion won will be paid after antitrust approval.
Founded in 2001, Wil Technology produces semiconductor and liquid crystal display inspection equipment. As of the end of last year, Chief Executive Lee Yoon-jung and Executive Vice President Kim Myung-hwan held 37.46% and 6.04% equity, respectively, and domestic venture capital Almus Investment holds 16.90% equity through a project fund.
Hansol Holdings holds convertible bonds and exchangeable bonds issued by Wil Technology, and it decided to exercise the conversion and exchange rights and sell all resulting shares to Hansol Technics. After the conversion and exchange rights are exercised, the Wil Technology equity transferred by Hansol Holdings will exceed 50% of the total shares outstanding.
Accordingly, Hansol Holdings will strengthen its control over Hansol Technics by transferring Wil Technology equity while also making a capital contribution to Hansol Technics. Hansol Holdings decided to contribute 45 billion won by participating in Hansol Technics' third-party allotment paid-in capital increase.
Separately, Hansol Technics also decided on a 45 billion won rights offering for existing shareholders.
Hansol Technics set slightly different terms between funding via the parent and the rights offering for general shareholders. Hansol Holdings will buy new shares of Hansol Technics at 4,885 won per share, while new shares for general shareholders will be issued at 3,625 won per share, reflecting a 20% discount to the reference price. In the rights offering, the employee stock ownership association will receive a 20% priority allotment, and 0.3 new shares will be allotted per one share.
Although Hansol Technics' share price surged after the acquisition decision was announced, there are concerns the company's financial burden could grow. Hansol Technics has been expanding through successive acquisitions, but its results are deteriorating. While annual revenue has stagnated around 1.2 trillion won over the past three years, annual operating profit fell from about 50 billion won in 2023 to about 20 billion won last year.
Hansol Technics acquired IONES (now Hansol IONES), which engages in precision machining, cleaning, and coating for semiconductor equipment materials, in 2022, and last year acquired SI Materials, a semiconductor materials regeneration company.
As a result, internal cash flow (ICF), which refers to the cash ultimately left after deducting all essential capital expenditures and other corporate acquisitions from cash generated by operations, turned negative last year.
The company also plans annual investments of 60 billion won in 2026–2027, focused on semiconductors. But cash on hand is insufficient, and external borrowing is increasing.
In addition, there could be additional funding needs related to Hansol Oriontech (formerly Orion Technology), acquired last year. Hansol Technics acquired Hansol Oriontech together with private equity fund Highland, and at the time of the deal, Highland added a condition allowing a put option to sell its equity if the company fails to list through an IPO within three years.
The problem is that as duplicate-listing regulations have tightened, the chances of Hansol Oriontech listing have greatly diminished. If Highland exercises the put option, Hansol Technics (or a third party designated by Technics) must acquire Highland's equity in Hansol Oriontech.
Hansol Technics said it is acquiring Wil Technology, a non-memory-focused probe card (a core semiconductor testing component) manufacturer, by raising funds in line with the semiconductor market's upward cycle. Wil Technology reported 67.5 billion won in revenue last year, with operating profit of about 10 billion won. Around 90% of total revenue comes from supplies to Samsung Electronics.