This article was published on May 19, 2025, at 5:25 p.m. on the ChosunBiz MoneyMove site.
Private equity fund operator JC Partners is pursuing an exit four years after acquiring the zinc oxide producer Hwangjo. The company is keeping both the sale of management rights and attracting investments open, and if successful in exiting at the targeted corporate value, the internal rate of return (IRR) is estimated to reach 32%.
According to investment banking (IB) industry sources on the 19th, JC Partners is pursuing the sale of 100% equity in Hwangjo while also keeping the option for partial withdrawal through external funding open. The target corporate value is over 100 billion won.
Hwangjo is a company that recycles steel mill dust to produce zinc oxide, a raw material for tires and paints. JC Partners acquired all of its equity for 32 billion won in 2021.
Instead of hastily selling management rights, JC Partners decided to continue with the sale while keeping the possibility of attracting minority investment open. The company plans to receive investments from external sources in the form of preferred shares, while also proactively obtaining partial withdrawals through dividends.
In fact, JC Partners utilized surplus cash after capital expenditure (CapEx) investments last December to receive dividends of 7 billion won. The company plans to also implement dividends this year to recover part of the investment in advance.
Since its acquisition by JC Partners, Hwangjo has continuously achieved structural growth and improved profitability. The average earnings before interest, taxes, depreciation, and amortization (EBITDA) for the four-year period from 2021 to 2024 is 11.3 billion won, which is 2.5 times higher than before being sold to JC Partners. During this period, the average annual revenue was 37.7 billion won.
The debt ratio has significantly decreased from 168% at the end of 2020 to 56% at the end of last year. The company explained that it improved its financial structure by proactively repaying high-interest borrowing funds. This allowed them to expand their second-phase capital expenditure (CapEx) and increase production capacity by 1.5 times compared to before.
JC Partners aims to achieve an exit within this year. If it sells its management rights or receives investments in the form of preferred shares based on a corporate value of 100 billion won by the end of this year, the Gross IRR (investment return excluding management fees and performance fees) for JC Partners is expected to be about 32%.