Powermax, a transformer specialist company with an annual revenue of 80 billion won, has been sold to the newly established private equity fund operator, Tenet Equity Partners. The enterprise value is estimated to be around 200 billion won, and Tenet EP has successfully completed a 100 billion won M&A deal in its second year of establishment.
According to the investment banking industry on the 30th, Tenet EP completed the acquisition of 90% of Powermax's equity in mid-January. They acquired a total of 90% by combining the 80% stake held by the founder, Chairman Jang Se-chang, and other related parties, with the 10% equity held by financial investor CAS Corporation.
Tenet EP initially planned to raise half of the acquisition price through a project fund and the other half through acquisition financing. However, more limited partners (LPs) than expected showed interest in Powermax, and ultimately, it was able to inject over 80% of the total acquisition cost as equity. It is reported that pension funds and major asset management companies participated as LPs in the project fund.
Chairman Jang Se-chang and President Jang Dong-jin, the existing largest shareholders, decided to remain in the company after the sale of management rights to help enhance management and corporate value. It is also reported that Chairman Jang reinvested part of the sale proceeds into a special purpose company (SPC) created by Tenet EP for the acquisition of Powermax.
An investment banking industry official noted, "These days, it is common for owners to reinvest after selling their corporations while aiming for value enhancement."
Tenet EP is a newly established private equity fund founded by CEO Shim Jin-bo in January 2024. In its first year last year, it acquired a transformer company. The company's valuation was less than 50 billion won. This acquisition of Powermax is the second buyout deal that Tenet EP has executed, following last year's acquisition.
Powermax is a company established in 2000, originating from Icheon Electric Industry. It supplies electrical equipment such as transformers, generators, and switches to domestic and international customers. In addition to the electrical equipment business, it has also expanded its business area to include solar power inverters and energy storage systems (ESS).
Powermax's revenue last year was 79.7 billion won, and its operating profit was 19.3 billion won. Compared to the previous year, revenue surged by 63%, while operating profit soared by 197%.
The transformer market is steadily growing, driven by a global surge in power demand due to the artificial intelligence (AI) boom. In particular, the valuation of transformer-related corporations is consistently rising due to increased power demand in populous countries such as China and India.
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