South Korean law firms are witnessing a particularly active pipeline of work in the environmental and waste management space this year, with foreign and domestic private equity firms leading the investment drive, Asia Business Law Journal has learned.
“This uptick can be attributed to the natural cycle of private equity (PE) investments. Several years ago, PE firms made significant acquisitions in waste management, and we are now at the point where many are looking to exit, leading to more assets becoming available on the market,” said Jae Hyun Park, an M&A partner at Yulchon in Seoul whose primary areas of focus include private equity and overseas investment.
Park, together with partners Chee Kwan Kim and Ho Sung Song, recently led a Yulchon team advising South Korean private equity IMM-led consortium on the total buyout of domestic waste treatment firm Ecorbit for KRW2.7 trillion (USD2.04 billion) from local conglomerate Taeyoung Group-held TY Holdings and global PE firm KKR.
Kim & Chang has confirmed with Asia Business Law Journal that it advised the seller, but it did not specify which seller party ? KKR or TY holdings, or both ? it represented.
“Waste management companies in Korea have traditionally garnered more interest from financial investors rather than strategic ones, with many already passing through the hands of domestic PE firms,” said Park. “This creates opportunities for foreign PE firms to step in as new buyers”.
Swedish PE firm EQT Partners recently stepped in to acquire South Korea-based waste treatment company KJ Environment from Seoul-based PE firm Genesis Private Equity Management for a reported price of more than KRW1 trillion (USD733 million), according to Reuters.
Kim & Chang served as legal counsel to EQT, while Genesis enlisted Shin & Kim as its legal adviser. The Shin & Kim lead transaction lawyers were partner Hae Sung Jeong and senior foreign attorney Stephanie Kim.
Besides those two high-profile transactions, Park told Asia Business Law Journal that there was more ongoing M&A activity in the water treatment sector, with deals ranging from KRW200 billion to KRW300 billion.
“There are still numerous small to mid-sized waste management companies in Korea, which means there is potential for consolidation through mergers and acquisitions, leading to improved profitability,” said Park.
Read the related articles here:
Pair guides EQT’s USD738m buy in South Korean waste industry
Kim & Chang and Shin & Kim are assisting on Swedish investment organisation EQT’s acquisition of KJ Environment, a South Korea-based waste treatment company
Trio acts on Korea’s KRW2.7tn Ecorbit waste firm buyout
Simpson Thacher & Bartlett, Kim & Chang and Yulchon have advised on an IMM consortium’s KRW2.7 trillion (USD2.04 billion) full acquisition of South Korean waste treatment firm Ecorbit, Asia Business Law Journal has learned
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