IMM Private Equity (IMM PE), a Korean private equity firm, will raise 250 billion won from Kiwoom Securities to acquire Ehwa Diamond Industrial. With the financing nearing completion, IMM PE is expected to accelerate the closing of the deal.
According to the investment banking (IB) industry Friday, IMM PE selected Kiwoom Securities as the arranger for its acquisition of Ehwa Diamond Industrial. The acquisition financing amounts to approximately 250 billion won, with a financing rate in the high 5% range. IMM PE and Kiwoom Securities are said to have been in discussions since the early stages of the Ehwa Diamond Industrial acquisition.
IMM PE's fundraising is also nearing completion. IMM PE will invest 200 billion won through a blind fund and 200 billion won through a project fund. Together with the 250 billion won in acquisition financing, it will acquire a 73% stake in Ehwa Diamond Industrial. The total investment amounts to approximately 650 billion won. During the project fund raising process, a significant number of pension funds and mutual aid associations showed strong interest, allowing the funding to be completed faster than initially expected.
Ehwa Diamond Industrial, founded in 1975, ranks first in Korea's diamond tools market. Exporting products to more than 90 countries worldwide, the company is regarded as having globally top-tier competitiveness. Diamond tools are instruments that use diamond, the hardest material on earth, to cut, grind, and process metals and other materials.
Diamond tools have a significant impact on the precision and yield of production processes for automobiles and electronics. Changing diamond tools requires process readjustment, creating a lock-in effect for customers. Ehwa Diamond Industrial has secured global manufacturers including Samsung Electronics, Hyundai Motor, TSMC, and Bosch as clients. With rising domestic investment in advanced manufacturing sectors such as semiconductors, healthcare, and aerospace, improved earnings are also expected.
Backed by a balanced portfolio, Ehwa Diamond Industrial has posted stable earnings. It has also shown continuous revenue growth every year. On a consolidated basis, the company recorded revenue of 370 billion won and operating profit of 33 billion won last year. Through April this year, revenue is said to have increased approximately 10% compared with the same period last year.
IMM PE plans to actively pursue new business opportunities by making continuous investments in Ehwa Diamond Industrial's research and development (R&D) and key personnel, while strengthening collaboration between technology and sales divisions. It intends to support the execution of a mid- to long-term growth strategy by leveraging IMM PE's industrial network and diverse customer touchpoints within Korea's manufacturing sector.
"Ehwa Diamond Industrial is a company recognized for its technological capabilities in Korea," an IB industry official said. "I understand that the project fund attracted strong investor interest, with approximately 200 billion won raised quickly."
