ICG invests $200m in Korean injection molding company

This will be the fifth investment from ICG’s third Asia fund, which closed last year at $691 million. Following this transaction, it will be 60% deployed. Additional contributions will come from co-investors and from ICG’s balance sheet.

Founded in 1980, Yudo Group produces a range of injection molding, machining, and smart factory equipment. ICG is investing in the hot runner systems division only, helping to consolidate 45 subsidiaries under a single Hong Kong-based holding company. This is intended to maximize efficiency and improve governance with a public listing tentatively scheduled for two years’ time.

Yudo is the largest global manufacturer of hot runners, which are critical parts for plastic injection molding. The company is Korean in origin but China accounts for about half of its revenue. Manufacturing facilities are located in China, Korea, Malaysia, and Portugal.

Earlier this week, Platinum Equity agreed to buy Husky Injection Molding Systems – the number four player in the hot runners space and also a manufacturer of other injection molding equipment – from Berkshire Partners and OMERS Private Equity for $3.85 billion. The second- and third-largest industry participants, Milacron Holdings and Barnes Group, are both already listed in the US.

Details were not offered as to the size of Yudo’s business, but Milacron’s melt delivery and control systems division, which produces hot runners and other mold bases and components, generated sales of $389.9 million last year. It had an installed base of more than 150,000 hot runner systems. Barnes Group, meanwhile, recorded $376.6 million in revenue for its molding solutions products division.

A pure play hot runner systems business appeals to ICG because this is a particularly cash-generative segment of the injection molding industry, according to a source familiar with the situation. The private equity firm spent 14 months working with Yudo’s management team on a capital solution that supports the continued growth of Yudo China Holdings.

“Working in close partnership with founders and owners of unlisted companies, and building trust with their management teams, is central to our investment philosophy, and we hope to complete many more of these transactions in the future,” Wooseok Jun, a managing director and head of South Korea at ICG, said in a statement.

With EUR27.2 billion ($32.2 billion) in third-party funds and proprietary capital, ICG invests across the capital structure. The firm’s Asia fund considers minority and control deals, structured as debt or equity, while there are separate vehicles targeting mezzanine and minority equity investments in Japan and senior direct lending opportunities in Australia.

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• Topics
• North Asia
• Greater China
• Expansion
• Industrials
• South Korea
• China
• Intermediate Capital Asia Pacific
• Growth capital