Joint Management with EQT as the Second Largest Shareholder
Accelerating the Path as an Investment Specialist Company
SK Square announced on the 20th that it has completed all procedures to sell part of its stake in SK Shieldus to EQT Partners, a global investment firm under the Swedish Wallenberg family, for a total of 860 billion KRW.
Once EQT Partners completes the new share issuance procedure on the 21st to invest 200 billion KRW in SK Shieldus, the final shareholding structure of SK Shieldus will change to EQT Partners 68% and SK Square 32%. The previous shareholding structure was SK Square 63.1% and the Macquarie Asset Management consortium 36.9%.
Park Jung-ho, Vice Chairman of SK Square, is announcing the joint management plan of SK Shielders by SK Square and EQT Partners at a meeting in Barcelona, Spain, in March this year. [Photo by SK Square]
Of the 860 billion KRW from the share sale proceeds, 410 billion KRW was deposited on the day, and the 450 billion KRW loaned to EQT Partners is expected to be received within two years.
Earlier in March this year, SK Square announced a partnership with EQT Partners to co-manage SK Shieldus. By last month, all government approval procedures, including corporate merger reviews by China, the European Union (EU), and the Korea Fair Trade Commission, were completed. At the March press conference announcing the SK Square-EQT Partners joint management of SK Shieldus, Park Jung-ho, Vice Chairman of SK Square, stated, “To ensure the future growth of SK Shieldus, we intend to cooperate with EQT Partners to pursue additional growth in Korea while simultaneously developing a global expansion strategy.” He also said, “Starting with the first investment achievement since the launch of SK Square, we will create good investment opportunities in the downside market and actively implement shareholder returns.”
SK Square is evaluated to have accelerated its progress as an investment-specialized company by securing 860 billion KRW in funds, thereby establishing a sound cash flow and investment capacity. As of May, dividends of 89.4 billion KRW were also received from SK Hynix and others.
This investment attraction marks SK Square’s first large-scale full investment cycle (investment - corporate value enhancement - profit realization) achievement. Seeing future growth potential in the security industry, SK Square acquired physical security companies NSOK and ADT Caps in 2014 and 2018 respectively, then merged the two companies and incorporated ADT Caps into SK ICT affiliates. Since then, SK Square has focused its portfolio management capabilities on increasing corporate value over the coming years rather than merely engaging in mergers and acquisitions. From 2018, SK Square applied artificial intelligence (AI) and big data technologies from its affiliates comprehensively to ADT Caps’ existing services, achieving business and technological results in various new security areas such as smart home security, unmanned stores, and unmanned parking.
In 2021, ADT Caps merged with SK Infosec, Korea’s number one cybersecurity company, and changed its name to SK Shieldus. Through this, it established four major business systems: ▲ Cybersecurity (Infosec) ▲ Converged Security (AI-based converged security platform SUMiTS) ▲ Physical Security (ADT Caps) ▲ Safety and Care (unmanned stores and parking, smart home safety, quarantine, senior care).
Through these efforts, SK Shieldus’ current corporate value nearly doubled from the 3 trillion KRW range to the 5 trillion KRW range (based on equity value including debt) within five years since the acquisition of ADT Caps in 2018. In 2022, SK Shieldus’ sales and EBITDA (earnings before interest, taxes, depreciation, and amortization) also approximately doubled compared to the acquisition time, reaching 1.7928 trillion KRW and 415.2 billion KRW respectively.
SK Square is reviewing a shareholder return plan worth 200 billion KRW in accordance with its policy to share investment gains with shareholders. Detailed plans will be finalized after internal procedures such as board resolutions. Furthermore, as the second-largest shareholder of SK Shieldus, SK Square plans to support SK Shieldus’ growth through joint management with EQT Partners. EQT Partners plans to invest 200 billion KRW in SK Shieldus’ future growth businesses as previously agreed with SK Square, aiming to transform it into a global total security company. The composition of SK Shieldus’ management and board of directors will be disclosed soon after internal procedures.
Park Sung-ha, CEO of SK Square, said, “We are actively managing all portfolios held by SK Square,” adding, “With the goal of continuously increasing the corporate value of SK Square and its portfolio companies, we will show meaningful results to our shareholders in the second half of this year as well.”
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