Glenwood PE acquires Lafarge Halla for $542 mn

[Photo:Lafarge Halla Cement]

South Korea’s Glenwood Private Equity (PE) inked a deal to acquire Lafarge Halla Cement Corp. from LafargeHolcim Ltd. for about 630 billion won ($542 million), said the company Thursday.

This is the second buyout by the Korean private equity fund (PEF) since it purchased Tong Yang Magic Co. from Tong Yang Group in a consortium with NH PEF for around 300 billion won two years ago.

According to the investment banking (IB) industry, Glenwood PE and Hong Kong-based PEF Baring Private Equity Asia (PEA) consortium signed a deal with French LafargeHolcim to buy entire stake in Lafarge Halla Cement for 630 billion won. Glenwood PE will fund 400 billion won, while other 180 billion won will be financed by Baring PEA and another 50 billion won through corporate financing.

The actual acquisition price would be 530 billion won, with a 100 billion won in cash-back offer from the French company, according to Glenwood PE. The buyout will be completed by the end of April.

The deal is significant as it localizes the Korean cement maker from foreign ownership. Lafarge Halla Cement is the fifth largest in the industry in Korea in terms of market share as of 2014. Glenwood PE aims to strengthen its foothold by establishing its strategic partnership with other cement makers.

The Korean PEF has done an impressive job of turning around kitchen electronics appliance maker Tong Yang Magic after its acquisition in 2014. Tong Yang Magic’s operating profit jumped 30 percent from 21.1 billion won in 2013 to 30 billion won last year, with sales up 75 percent from 223.8 billion won to 390.3 billion won during the same period thanks to brisk rental business.

Glenwood PE is led by former Samsung Group Vice Chairman Lee Hak-soo’s second son Lee Sang-ho. His older brother Lee Sang- hoon is also in the same industry as chief of the private equity arm of Morgan Stanley in Korea and boasts a good track record in M&A deals including franchiser Nolboo NBG Co., tissue paper makers Monalisa Co. and Ssangyong C&B Inc.

By Kang Doo-soon, Han Woo-ram