Bain Capital emerged as the preferred bidder for HS Hyosung Advanced Materials Corp.’s tire steel cord business in a transaction valued at approximately 1.5 trillion won ($1.1 billion), according to a regulatory filing Monday.
The Boston-based private equity firm defeated domestic rivals including JKL Partners and STIC Investments to secure one of Korea’s largest industrial carve-outs by a foreign buyer this year. The transaction sets the stage for one of the country’s largest recent carve-outs in the industrial sector by a foreign private equity group, with a definitive share purchase agreement expected as early as September, pending due diligence.
The steel cord division, which generates about 40% of its total profit, recorded about 900 billion won in sales revenue and an estimated 150 billion won in earnings before interest, taxes, depreciation and amortization last year. The unit holds leading market positions in North America and Europe, ranking second globally.
Vice Chairman Cho Hyun-sang is divesting the business to reduce debt and fund expansion into electric vehicle materials, hydrogen and artificial intelligence. The company aims to use the sale proceeds to reduce its debt ratio, which stood at 230% at the end of last year.
However, the selection of a preferred bidder is being delayed indefinitely due to legal risks surrounding Cho, who faces investigation over investments linked to associates of Korea’s former first lady. A gap between the seller’s desired price and buyers’ offers up to 1 trillion won also complicates negotiations.
