Taekwang Industrial is teaming up with domestic private equity firm Busan Equity Partners (Busan EP) to bid for Nexflex, an advanced-materials maker. With multiple financial investors at home and abroad already in the race and strategic investors now showing interest, the sale price is expected to top 1 trillion won ($720 million).
Taekwang has entered the bidding for Nexflex after settling on Busan EP as its consortium partner, according to investment banking sources on the 12th. MBK Partners, Nexflex's largest shareholder, named Deutsche Bank as the sale's lead manager early this year and in June shortlisted Busan EP, a STIC Investments-A퍼lma Capital consortium and Bain Capital as qualified candidates.
A takeover by a domestic or foreign private equity firm had appeared most likely, but Taekwang's entry into the bidding set off competition to form consortiums, and Busan EP was ultimately chosen as the deal partner. Taekwang has been reviewing mergers and acquisitions from various angles to diversify its business. Acquiring Nexflex, an advanced-materials company, is seen as likely to create synergies with its existing chemicals business.
Nexflex makes flexible copper-clad laminate (FCCL), the key material in flexible printed circuit boards (FPCB) that are major components of smartphones and other IT devices, with its products ultimately supplied to Samsung Electronics and Apple. It has long held the No. 1 share of the domestic market. Originally the FCCL division of SK Innovation, it passed through domestic large-cap private equity firm Skylake Equity Partners before MBK became its largest shareholder. Last year it posted operating profit of 75 billion won ($54 million), up 82.8% from 2024, with earnings on a steep upward trajectory. An investment banking source said, "With another domestic manufacturer weighing an acquisition on the heels of Taekwang, the competition to form consortiums with strategic investors is continuing," adding that "the shift in the buyer pool has drawn out due diligence since the shortlist was set."
The investment banking industry expects the enterprise value to exceed 1 trillion won. That is because the shift in the buyer pool has intensified competition, prompting some bidders to consider raising their offer prices. Rather than holding a separate final round, MBK and Deutsche Bank are taking binding offers from each bidder after due diligence concludes.
STIC Investments and A퍼lma Capital, which had joined hands to bid for Nexflex, are now reviewing the deal separately. Bain Capital, which took part in the preliminary bid on its own, has dropped out of the race. Taekwang said it is "reviewing new business ventures through M&A in various areas such as beauty, healthcare and advanced materials, but nothing has been finalized at this point."
