Doosan Bobcat Inc., a prominent player in the compact construction machinery sector, announced its decision to reacquire Mottrol Co. for 246 billion won ($178.6 million). This move comes less than four years after Mottrol’s departure from the Doosan Group. The acquisition, approved by Doosan Bobcat’s board, involves purchasing a 100% stake from a consortium of Korean private equity firms Socius Advisors and Well to Sea Investment Co.
Mottrol, Korea’s leading hydraulic component maker, is known for its advanced hydraulic part-making technology, which is critical for industrial equipment. This acquisition is expected to bolster Doosan Bobcat’s business competitiveness by integrating these essential technologies.
Previously, Doosan Bobcat and Mottrol were sister companies under Doosan Group until late 2020 when Doosan Group sold Mottrol to the Socius-Well to Sea consortium for 453 billion won as part of its restructuring efforts to alleviate mounting debt. At the time of sale, Mottrol reported a consolidated operating profit of 57.8 billion won on sales of 663.8 billion won.
Despite competing bids from major players like Morgan Stanley Private Equity, China’s XCMG, and a Korean consortium of NH Investment & Securities PE and Opus PE, the Socius-Well to Sea consortium emerged victorious in acquiring Mottrol.
Mottrol, founded in 1974 and integrated into Doosan Group in 2008, was later merged with Doosan Corp., the group’s holding company, in 2010. However, due to financial pressures, Doosan Group divested Mottrol and other units in 2020 in exchange for state bailout funds.
In a strategic move, the Socius-Well to Sea consortium spun off Mottrol’s defense system hydraulic component-making business last December, creating MNC Solution, which is slated for an IPO on Korea’s Kospi later this year. Mottrol will now return to Doosan Bobcat without its defense system operations.
The market reacted positively to the news, with Doosan Bobcat’s shares rising 3% to 54,400 won. Doosan Bobcat CEO Scott Park highlighted the expected synergies from the vertical integration with Mottrol, aiming for growth through increased orders.
Having joined Doosan Group in 2007, Doosan Bobcat has made significant strides, entering the global top 10 construction equipment makers in sales for the first time last year. The company’s operating profit surged 29.7% in 2023 to 1.39 trillion won, with sales up 13.2% to 9.76 trillion won.
Doosan plans to finalize the Mottrol acquisition by September 30 after signing a stock sale agreement with the Socius-Well to Sea consortium. This reacquisition marks a strategic step in strengthening Doosan Bobcat’s market position through enhanced technological capabilities.
