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Production facility of Yulgok in Changwon, South Korea. (Courtesy of Yulgok) |
[Alpha Biz= Ellie Kim] The sale of management control in Yulgok is gaining strong momentum, with intensifying competition among private equity firms pushing its valuation sharply higher.
According to investment banking sources on June 9, negotiations are underway between the sellers—a consortium of JKL Partners and WJ Private Equity—and shortlisted bidders following the close of final bids last week.
While the consortium’s 47.09% stake is confirmed for sale, the fate of an additional 47.23% held by CEO Wi Ho-cheol remains uncertain. However, many in the market expect a full 100% stake sale, including the CEO’s shares.
Five bidders have emerged as final contenders: STIC Investments, Premier Partners, Hong Kong-based Anchor Equity Partners, KCGI, and VIG Partners.
Among them, Anchor Equity Partners is reportedly the most aggressive bidder, driven by the need to deploy nearly 1 trillion won in dry powder before the investment period for its fourth blind fund expires this year.
However, Anchor faces potential resistance from local stakeholders in Sacheon, South Gyeongsang Province, where Yulgok’s core operations are based. Community concerns over foreign ownership of a key regional employer could weigh on the deal.
VIG Partners, seen as a strong rival, is highlighting its expertise in the aviation sector. The firm points to its experience with Eastar Jet and its capabilities in aircraft manufacturing and maintenance, repair, and overhaul (MRO) as key advantages that could generate synergies with Yulgok’s business.
Yulgok’s valuation was initially estimated at around 400 billion won for a full stake, but the heated bidding has pushed expectations significantly higher, with some forecasts now exceeding 500 billion won.
Adding to its appeal, Yulgok is reportedly in discussions with a global defense contractor for a large-scale contract worth up to 700 billion won over 10 years, with a high likelihood of securing the deal. Sellers are said to be requesting bidders to submit valuation scenarios both with and without the potential contract factored in, further driving competitive tension.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
