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THE INVESTOR
October 21, 2019
Big Reunion

Deals

Sae-A to acquire fiberboard maker Tailim Packaging

  • PUBLISHED :September 18, 2019 - 15:31
  • UPDATED :September 18, 2019 - 15:38
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South Korean clothing manufacturer Sae-A Trading was picked as the preferred bidder for the country’s largest corrugated fiberboard makers Tailim Packaging and Tailim Paper, according to IMM PE, the largest shareholder that is selling them in a bundled deal, on Sept. 18.

Sae-A is expected to pay between 700 billion won ($587 million) to 800 billion won for 71 percent in Tailim Packaging and 100 percent stake in Tailim Paper. 

Following the news, Kospi-listed Tailim Packaging saw its share price rise more than 6 percent. 




Related: 
Hansol walks away from W1tr Tailim acquisition deal
Corrugated fiberboard maker Tailim put up for sale
Seoul-based IMM PE buys Linde Korea for W1.3tr


IMM, which purchased Talim Packaging and Tailim Paper for 350 billion won in 2015, has put up the two companies on sale. The deal attracted many bidders, including a consortium of Shanying International Holdings, Bain Capita and TPG Capital.

In the past few years, the sale of of both companies, whose combined value is estimated at 1 trillion won rose with the increase in demand for delivery packages. In 2018, Tailim Packaging’s sales rose to 600 billion won, soaring 61 percent from 2016, while Talim Paper logged 480 billion won, up 54.2 percent during the same period.

“The price was important, but other factors were also behind the decision to select Sae-A as the preferred bidder,” said an IMM PE official. “We thought it could manage the companies in the long term,” the official said, adding that the final price will be decided after due diligence and negotiations.

Founded in 1986, Sae-A, specializes in original equipment manufacturing, operatating 40 clothing factories around the world including in the US, Vietnam and Indonesia. Its clients include global clothing brands such as Gap and Uniqlo. The company’s sales amounted to 1.77 trillion won last year.

“We’re diversifying our business portfolio. Last year, we acquired STX Entech, engineering, procurement, construction business from STX Heavy Industries,” a company official said. “We participated in the bidding after taking into consideration the high profitability and potential of Talim as the No. 1 in the industry and the synergies with our existing businesses.

Once the deal is closed, Sae-A will be the first nonpaper maker that will own a corrugated fiberboard company. The deal is expected to close by early next year.

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

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