Partnership to support growth of electrical auto parts businesses
and KKR's investment in electric vehicle battery copper foil business
SEOUL, South Korea--(BUSINESS WIRE)--
LS Group ("LS"), one of South Korea's largest diversified corporations,
and KKR, a leading global investment firm, today announced the signing
of a definitive agreement under which KKR will become joint partners
with LS in LS Automotive ("LSA" or the "Company"), an electrical auto
parts maker for the global automotive industry, and will additionally
acquire LS Group affiliate LS Mtron's ("LSM") copper foil and flexible
copper clad laminate business (the "CF/FCCL Business").
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Under the terms of the agreement, an affiliate of KKR and LS will
together invest to create a new joint venture holding company ("LSA JV")
and acquire the business of LSA. LS will maintain the control of the LSA
JV owning 53% of the LSA JV's voting shares and the LSA JV will remain
as an affiliate of LS Group. KKR will own 47% of the LSA JV's voting
shares. Concurrently, KKR will acquire full ownership of LSM's CF/FCCL
Business segment. KKR's investment implies a combined enterprise value
of the LSA and the CF/FCCL Business of approximately KRW1.05
trillion (US$923.6 million).
Established in 1973, LSA is a leading auto parts company in South Korea
that has successfully established globally competitive positions in
high-growth auto component segments including switches, interior lamps
and human machine interface ("HMI") systems, and electrical and
electronics components such as power seat modules, electrical control
units, sensors and relays. LSA is the top Tier-1 supplier of HMI
components to Hyundai Kia Motors, as well as major global original
equipment manufacturers ("OEMs") in the U.S. and Japan, and leading
local OEMs in China and India.
The CF/FCCL Business manufactures and sells copper foils for large
capacity lithium-ion batteries for primarily electric vehicle ("EV")
applications. The copper foil business for EV battery applications is
expected to be among the fastest-growing segments of the auto industry
due to rising demand for environmentally friendlier transportation.
LSM's EV copper foil business supplies global EV battery leaders
including LG Chemical and major battery manufacturers in Japan and China.
Joon-woo Lee, Senior Vice President of LS Corp, commented, "This
partnership provides a terrific opportunity for LS Group, as a large,
Korean conglomerate, to align and strengthen our focus on our core
businesses. We are very pleased to enter into a partnership with KKR, a
global investment firm with significant industry and operational
experience, and work alongside the team to achieve growth in the future."
Hyoung Seok Lim, Managing Director at KKR, and Chung Ho Park, Director
at KKR, said, "We are very excited to partner with LS Group and the
management teams and employees of LSA and the CF/FCCL Business to
support their innovation and growth as the automotive industry continues
to evolve rapidly and the adoption of electric vehicles expands quickly.
We look forward to supporting the management teams by leveraging our
international network and industry expertise to enhance the business'
operations and success beyond South Korea and China."
KKR has maintained a strong track record of investing in South Korea
from its pan-regional private equity funds since 2009 and has since
invested or committed approximately US$800 million in the market. KKR
has strengthened its commitment to South Korea in recent years to
provide strong companies with the financial and operational resources to
achieve growth and improve productivity.
KKR will make its proposed investment from its US$9.3 billion Asian Fund
III. The transaction is subject to customary approvals. Further details
of the transaction were not disclosed.
KKR is a leading global investment firm that
manages multiple alternative asset classes, including private equity,
energy, infrastructure, real estate, credit and, through its strategic
partners, hedge funds. KKR aims to generate attractive investment
returns by following a patient and disciplined investment approach,
employing world-class people, and driving growth and value creation with
KKR portfolio companies. KKR invests its own capital alongside its
partners' capital and provides financing solutions and investment
opportunities through its capital markets business. References to KKR's
investments may include the activities of its sponsored funds. For
additional information about KKR & Co. L.P. (NYSE: KKR), please visit
KKR's website at www.kkr.com
and on Twitter @KKR_Co.
About LS Mtron
LS Mtron is an industrial machinery and
high-tech components firm under the LS Group. Established in 2008, the
company's sales and operating profits stand at 2.089 trillion won and
103.4 billion won as of 2016, respectively. Mtron employs approximately
1,700 staff in Korea. Key operations include machinery such as tractor,
injection molding machines, and track shoes as well as electric and auto
components such as connector, antennae, cooper foil, brake hose, and
ultra capacitor. LS Mtron has a total of 5 business locations in Korea
including facilities in Jeonju, Jeongeup, and R&D centers in Anyang and
Gunpo. Globally, LS Mtron operates in a total of 16 countries including
the US, China, Brazil and Vietnam.
About LS Automotive
Established in 1973, LS Automotive is a
vehicle components manufacturer based in Korea with a global presence.
In 2008, the company was acquired by LS Mtron as part of LS Group's
efforts to further strengthen its competitiveness in auto components. LS
Automotive has since achieved strong growth and market expansion
including China and continues to engage in proactive investment in R&D
for the future such as autonomous and electric vehicle components. As of
2016, LS Automotive recorded revenue and operating profits of KRW 911
billion and KRW 62.8 billion, respectively. LS Automotive's key
customers include Hyundai Kia Motors, GM, Ssangyong, Fiat Chrysler,
Audi, Daimler, Nissan, Mitsubishi and others. The company has
approximately 1,150 employees in Korea.
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Dae-sung Kim, +82 2 2189 9784
Anita Davis, +852 3602-7335
Kristi Huller / Cara Kleiman, +1 212-750-8300
Signature (for KKR Korea):
Nuri Hwang, +82 2 6951 3557
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