Control of Nexflex, South Korea's largest flexible copper clad laminate (FCCL) maker, is set to pass to private equity firm Busan Equity Partners (Busan EP). The company is valued at about 900 billion won on a 100% stake basis. Existing largest shareholder MBK Partners will reacquire a 17% stake and remain as a shareholder.
According to investment banking (IB) industry sources on the 13th, MBK Partners signed a share purchase agreement (SPA) with the Busan EP consortium on the 12th. Deutsche Bank served as the sell-side adviser.
MBK Partners' reinvestment amount is 153 billion won. The consortium will hold the remaining 83%. The structure is reported to have been proposed by Busan EP, and is seen as a mechanism to reduce the acquirer's burden of raising equity capital. Private equity firm Appaloosa Capital will also provide about 30 billion won in subordinated loans. Appaloosa Capital plans to pursue a share exchange and business cooperation between portfolio company Flexion and Nexflex after the acquisition is completed.
In February, Busan EP offered about 850 billion won and obtained exclusive negotiating rights. However, it lost preferred bidder status after failing to secure acquisition financing. Afterward, when MBK Partners switched to a competitive bidding process, Busan EP re-entered the race. In September, Taekwang Industrial, which had been a key source of funding, exited the consortium. Recently, acquisition financing arrangers including Shinhan Investment Corp., DB Financial Investment and Daol Investment & Securities completed internal investment review approvals.
Nexflex produces FCCL, a core material for flexible printed circuit boards (FPCBs) used in smartphones. Companies that supply FPCBs to Apple and Samsung Electronics are its major customers. Last year, its revenue was 269 billion won and operating profit was 75 billion won. These were increases of about 65% and 83%, respectively, from a year earlier.
The company originated in the FCCL business unit of SK Innovation. Skylake Equity Partners acquired it in 2018, and in 2023 MBK Partners bought the entire stake for about 530 billion won. For MBK Partners, this marks a return on its investment in about three years. The equity value in this deal is about 1.7 times the acquisition price at the time.