Glenwood invests $514m in Hanwha's advanced materials unit
Korean carve-out specialist Glenwood Private Equity has agreed to acquire a significant minority stake in the advanced materials unit of Hanwha Solutions, a listed subsidiary of Hanwha Group, for an enterprise valuation of KRW 680bn (USD 514.2m).
Hanwha Advanced Materials produces lightweight composite materials – supplying thermoplastics used in car bumpers and seat back frames, bonding sheets used in printed circuit boards – and solar cell components. It has manufacturing and R&D operations across North America, China, and Europe.
Glenwood is participating in the transaction through its credit arm. It will acquire a 30.7% interest in Hanwha Advanced Materials for KRW 354.3bn and a 39.7% stake in HAM Holdings, a subsidiary that serves the automotive sector in the US, for KRW 145.7bn, according to a filing.
In addition, Glenwood will subscribe to KRW 127.5bn and KRW 52.5bn in convertible preferred shares issued by Hanwha Advanced Solutions and HAM Holdings, respectively. This will take its stake in each entity to 47.24%. The goal is to pursue an IPO within five years.
Hanwha Solutions recorded KRW 10.7trn in sales and KRW 738.3bn in operating profit in 2021, up 16.6% and 24.3% year-on-year. Net profit rose 107.6% to KRW 626.2bn. The advanced materials division posted sales of KRW 938.9bn and operating profit of KRW 9.7bn.
Glenwood was established in 2014 and made its first two investments – in Tongyang Magic and Halla Cement – on a deal-by-deal basis. Supported by strong exits from these investments, it raised a debut blind pool fund of KRW 450bn. A second vehicle of KRW 900bn closed earlier this year. The strategy is almost exclusively carve-outs.
The credit unit was established last year with a view to addressing structured investment opportunities that do not fall within the remit of the private equity fund and provide investors with a different risk-return profile.
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