Bain Capital, a global private equity fund (PEF) manager, has been selected as the preferred bidder for the acquisition of the 'tire steel cord' business division, which HS Hyosung Advanced Materials is currently seeking to sell.
On July 28, HS Hyosung Advanced Materials announced that it had selected Bain Capital as the preferred bidder for this business division.
HS Hyosung Advanced Materials began the process of selling its tire steel cord business through a preliminary bidding round in February, and entered the main bidding phase in late June. Initially, domestic PEF managers such as STIC Investments and JKL Partners were considered strong candidates. However, contrary to expectations, Bain Capital, a foreign PEF, was selected as the preferred bidder. Industry sources cite pricing issues as the key reason for this selection.
The two parties are expected to sign the final share purchase agreement (SPA) within the next one to two months, and the final acquisition price is anticipated to be in the mid-1 trillion won range. It is reported that the sale price was adjusted downward during negotiations following the main bidding phase.
Steel cord serves to support the weight applied to tires. Hyosung's tire steel cord business division holds the number one market share in the United States and ranks second globally. Last year, the tire steel cord business division reportedly achieved sales in the 900 billion won range and an EBITDA (earnings before interest, taxes, depreciation, and amortization) of approximately 150 billion won.
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