April 25, 2024

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[THE INVESTOR] NEPES Advanced Materials Corp. announced on Feb. 27 that Korean firm Keystone Private Equity is set to acquire a controlling stake of 31.47 percent for 22.9 billion won (US$21 million).

The KOSDAQ-listed semiconductor parts maker’s main client is semiconductor maker SK hynix. The deal is part of efforts to inject funds to invest in new businesses.

After selling 900,000 shares, the three largest shareholders -- including NEPES CEO Lee Byung-koo and his wife Lee Sung-ja -- will hold a 6.99 percent stake. 

“NEPES AMC is a healthy company that has had a stable management for the last decade and has great potential, but it lacks new investments,” said an official from Keystone PE. “Once new funds are injected, the business will take off in earnest.”

As part of the contract, NEPES AMC will also receive new investments worth 40 billion won from domestic financial institutions including Shinhan Financial Group after closing the deal.

NEPES AMC is an affiliate of NEPES Group, consisting of 11 companies mostly involved in manufacturing and distribution of semiconductors and electronics parts. The group was founded in 1994 by the CEO, a former LG Electronics engineer.

NEPES’ revenue fell dramatically in the past two years. In 2014, the company logged 24.8 billion won in sales and 4.2 billion won operating profit but it has been in the red since 2016, recording 183 billion won in sales and 2 billion in operating loss.

Keystone is a Seoul-based firm -- not be confused with the US-based PEF -- which acquired construction company Dongbu Corp. and Daewoo Shipbuilding & Marine Engineering. It is leading a consortium that is investing 1 trillion won in Korea’s retail giant E-Land.

Shares of NEPES AMC rose almost 8 percent to 19,600 won following the news.

By Park Ga-young (gypark@heraldcorp.com)