Crescendo Postpones HPSP Sale, Cites Recapitalization Through SPC Formation

The sale of HPSP, a semiconductor equipment company owned by Crescendo Equity Partners (hereafter Crescendo), has been postponed. This appears to be because heightened potential uncertainties, such as tariff risks originating from the United States, have caused a decline in the share price, making it difficult to secure a satisfactory sale price.

On May 12, HPSP disclosed that 'Presto No.6 Private Equity Investment Limited Partnership', a fund registered by Crescendo, had contributed its 32.8 million common shares (39.42%) to a special purpose company (SPC) named 'Heat 2025 Holdings LLC', resulting in a change of the largest shareholder. Although the largest shareholder has changed on paper from the fund to the newly established SPC, the actual owner, Crescendo, remains unchanged.

Crescendo explained, "We established a special purpose company (SPC) to facilitate a smooth exit, including through recapitalization (Recap)," adding, "As a result, the SPC has become the largest shareholder of HPSP, but Crescendo's management control over HPSP remains unchanged." Through this recapitalization, the limited partners (LPs) who invested when Crescendo acquired HPSP from Poongsan Group in 2017 will be able to partially recover their investment.

Earlier this year, Crescendo conducted a preliminary bidding process, reportedly attracting global private equity (PE) firms such as MBK Partners, Blackstone, and Bain Capital. However, as uncertainties increased due to the impact of Trump-era tariff risks on the semiconductor industry, Crescendo's share price stagnated, leading to issues regarding the sale price. There were rumors that Crescendo intended to sell for around 2 trillion won, but HPSP's recent market capitalization has fallen short of that figure.

Crescendo also stated, "Rather than rushing to sell high-quality assets in the current market environment, we plan to exercise caution by providing interested buyers with sufficient time, so that we can complete a successful exit when appropriate transaction conditions, including price, are met."

Going forward, Crescendo is expected to wait for an upturn in the semiconductor cycle, based on the assessment that HPSP's technological moat in equipment manufacturing will be sustained. Last year, Korea Investment & Securities analyzed that "because the process involves handling hydrogen, it takes a long time for new competitors to receive approval," and predicted that "HPSP's monopoly power will be maintained for at least five years."