IMM PE, Mirae agree to sell stake in Korea defense business
IMM Private Equity and Mirae Asset Private Equity are set to exit South Korea-based Doosan Defense Systems & Technology (DST) after Hanwha Techwin agreed to buy the business for KRW695 billion ($607 million).
Hanwha Techwin, which was sold by Samsung Electronics to Hanwha Group in 2014, was announced as the preferred bidder for Doosan DST last month. A regulatory filing identifies the sellers as Doosan Group-controlled DIP Holdings and Odin Holdings, which is owned by the two PE firms. Odin has a 49% stake in the business, with DIP holding the balance.
AVCJ Research's records indicate that IMM and Mirae invested KRW215.6 billion in Doosan DST in 2009. Concurrently, they also invested in Samhwa Crown & Closure, SRS Korea and Korea Aerospace Industries. The combined value of the four deals was KRW780 billion, with the PE firm and Doosan Group making equity commitments of KRW270 billion and KRW280 billion, respectively.
Doosan Group has sold a string of assets as it looks to make good on a 2015 pledge to cut its debt load by more than KRW1 trillion. Earlier this year it agreed to sell a majority stake in machine tools business Doosan Infracore to MBK Partners.
Doosan DST sells products including armored vehicles, air defense systems and missile launchers. It generated sales of KRW693.2 billion in 2015, up from KRW615.6 billion the previous year. Hanwha Techwin focuses more on robotics and video surveillance and security systems.
IMM made its investment through the IMM Rose Gold Private Equity Fund, which closed at KRW312.5 billion in in 2008. A third iteration of that fund is currently being raised. Mirae's investment came from the KRW359 billion Mirae Asset Partners Private Equity V, a 2008 vintage vehicle.
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