Affirma invests $77m in Korean steelmakers

The deal comprises SeAH FS, which supplies steel tubes used in automobiles and home appliances like refrigerators and air conditioners, and SeAH ESAB, a specialist in manufacturing welding materials. Their combined revenue and EBITDA for 2020 were $365 million and $26 million, respectively, according to a statement.

SeAH Group said in a separate filing that the divestment of SeAH FS would generate proceeds of KRW69.3 billion ($60.6 million). It added that SeAH FS reported KRW103.9 billion in revenue in 2020, down 18.5% year-on-year, while the company swung from a net profit of KRW591 million to a net loss of KRW16.2 billion.

SeAH Group has steel operations globally as well as domestic interests in chemicals, logistics, engineering, IT, and defense and aerospace. Sales reached KRW4.3 trillion in 2020, while the company posted a net loss of KRW268.6 billion compared to a profit of KRW54.5 billion a year earlier.

The investment comes from Affirma’s fifth Korea-focused fund, which achieved a first close of KRW443 billion in April. The overall target has been increased from KRW500 billion to KRW700 billion. The vehicle is larger than its predecessor but also has a broader mandate, pursuing deals in China, India, and Southeast Asia, as well as in Korea.

Affirma’s Korea’s funds were previously raised under the Standard Chartered Private Equity (SCPE) Korea name.

The SeAH assets are the second investment from Fund V – after a $181 million commitment to SK Telecom’s mobility business – and the fourth in Korea since Affirma’s formation through a spin-out from Standard Chartered Bank. Other deals include meat processor Sunwoo Fresh and e-commerce player APR.

“The Korean industrial sector is well-positioned to the recovery of the global economy and we believe the steel tube business of SeAH FS and welding rod business of SeAH ESAB have a lot of potential to grow further by expanding its geographical footprints and customer base,” said Taeyub Kim, co-founder and head of Korea at Affirma.

“We look forward to seeing the growth of SeAH FS and SeAH ESAB by using our global franchise to help them grow, both organically and inorganically.”

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• Topics
• North Asia
• Industrials
• Buyouts
• Affirma Capital
• South Korea
• manufacturing