EQT buys Korean security services provider

The transaction values SK Shieldus at KRW 3trn (USD 2.3bn), with SK Square, an investment holding company under Korean conglomerate SK Group, selling 21.9m shares – or a 28.8% stake – to EQT Infrastructure VI for KRW 864.6bn, according to a filing. Meanwhile, Macquarie is selling its 36.9% holding to EQT for an undisclosed price.

EQT will own 68% of the company on completion, with SK Square retaining 32%, the private equity firm said in a statement. Macquarie is making a full exit.

SK Telecom, another SK Group asset, and Macquarie bought SK Shieldus – then known as ADT Caps – in 2018 for KRW 2.97trn from The Carlyle Group. That deal comprised KRW 1.28trn in equity and the assumption of KRW 1.7trn in debt. SK Telecom contributed KRW 702bn for a 55% stake, with Macquarie putting in KRW 574bn for the remainder.

Carlyle’s exit underlined how infrastructure investors were moving into areas typically occupied by private equity, taking advantage of a lower cost of capital to target assets regarded as sufficiently de-risked. EQT is part of this trend. Its core-plus infrastructure strategy – to date most visible in Australia – looks for infrastructure assets that have scope for operational value creation.

This is the first investment in Korea by EQT Value-Add Infrastructure. The fund being used, EQT Infrastructure VI, is currently in the market seeking EUR 20bn (USD 21.2bn). EQT said last month that the hard cap had been set at EUR 21bn.

SK Shieldus is an integrated physical security operator that covers 680,000 commercial customer sites through a network of more than 100 central monitoring centres nationwide. It services encompass video surveillance and dispatch, access control, and facilities management. The company also has a closed loop offering comprising physical and cyber protection for strategic locations.

EQT said that SK Shieldus is supported by strong secular tailwinds such as an ageing population, increased digitisation of traditional on-location guard services, and an increased focus on cyber security. Korea’s security market has high barriers to entry, with SK Shieldus acting as a de facto extension of public police and security services operations.

Initiatives planned by EQT include the introduction of more tailored and digitised security service offerings and the decarbonisation of SK Shieldus’ fleet by phasing in electric vehicles.

"The company is a clear leader in both the Korean physical and cyber security markets, and EQT Value-Add Infrastructure is excited about partnering with SK Square to support SK Shieldus as it continues to roll out new digitised security solutions and invest in the decarbonisation of its vehicle fleet,” said Sang Jun Suh, a managing director and head of EQT Infrastructure in South Korea.

Standard Chartered served as financial advisor to EQT on the deal, with Kim & Chang serving as legal counsel, PwC providing financial, tax and technology advice, and BCG assisting on commercial due diligence.

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• Topics
• North Asia
• Infrastructure
• Infrastructure
• Support services
• Buyouts
• Trade sale
• South Korea
• EQT Partners
• Macquarie Group