Glenwood sells Korean films business to French strategic

Glenwood acquired a 54% stake in PI Advanced in 2020 for USD 512m. The company was established in 2008 as a joint venture between SKC, a chemicals-focused subsidiary of SK Group, and Kolon Industries. Each party sold a 27% interest to Glenwood.

BPEA EQT agreed to take out the Korean private equity firm in June 2022 for KRW 1.28trn (USD 1bn), or KRW 80,302 per share, a substantial premium to the trading price of around KRW 50,000 per share. By December, the stock had fallen to KRW 30,700 and BPEA EQT walked away from the deal.

Glenwood said this action was contractually invalid and urged BPEA EQT to make good on the agreement. A source close to BPEA EQT said that the deal was conditional on securing regulatory approvals and these did not arrive in time.

PI Advanced is currently trading around the KRW 35,200 mark with a market capitalisation of approximately KRW 1trn. Arkema said the remaining 46% of the company’s shares will continue to be listed on the Korean exchange.

PI Advanced produces of polyimide films for flexible printed circuit boards and graphite sheets used in mobile devices and electric vehicles (EV). It claims to be the global market leader with a 30% share. Arkema said in a statement that the company benefits “from the growing need for miniaturization, higher thermal management and increased safety and durability.”

Operations include two factories and R&D centres in Korea that employ approximately 320 people. Revenue reached KRW 261.8bn in 2022, down from KRW 301.9bn a year earlier, which Arkema said was a temporary effect, driven by large destocking in the global consumer electronics market. Net profit for the year fell from KRW 64bn to KRW 41.8bn.

Arkema noted that PI Advanced enjoyed strong annual average sales growth of 12% between 2012 and 2021. It expects annual sales growth of around 13% in the coming years, supported by a recently finalised capital expenditure programme of EUR 100m.

Strong uptake is expected for 5G antennas and high-resolution OLED displays, while there will continue to be robust demand from the flexible screens and EV markets. In EV, PI Advanced provides tapes for battery cell insulation, flexible printed circuit boards for battery management systems, and varnishes for high-voltage motor coils.

“This acquisition is fully aligned with our strategy to be at the forefront of high-performance materials for high growth end markets supported by megatrends such as electric vehicles and advanced electronics,” said Thierry Le Henaff, chairman and CEO of Arkema.

Arkema is global manufacturer of speciality materials, specifically adhesives, advanced materials, and coatings. It operates in 55 countries and generated sales of EUR 11.5bn in the most recent financial year.

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.

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• Topics
• North Asia
• Trade sale
• Industrials
• South Korea
• Glenwood Private Equity
• BPEA EQT
• manufacturing