South Korea’s wood material maker Dongwha Enterprise said Aug. 14 that it has bought an 89.63 percent stake in battery electrolyte maker Panax Etec, valuing the firm at 131.5 billion won ($108.4 million).

Dongwha paid 117.9 billion won to acquire the stake from Seoul-based private equity firms JKL Partners, Quintessa Investment and Seven Bridge Private Equity.

Dongwha Enterprise CEO Kim Hong-jin (left) and JKL Partners CEO Jung Jang-geun pose for a photo at an event celebrating the acquisition on Aug. 14.
Dongwha Enterprise

The news came a month after Dongwha Enterprise was selected as the preferred bidder in July. The JKL Partners-led consortium had earlier valued Panax Etec at 200 billion won.

JKL Partners made its first investment in Panax Etec in 2013, buying 65 billion won equities and bond warrants to become the second-largest shareholder.

Spun off from Ukseung Chemical in 2009, Panax Etec is the first Korean company to produce homegrown electrolyte products for secondary batteries, in the global market largely dominated by players including Japan’s Mitsubishi Chemical and Ube Industries, as well as China’s Shenzhen Capchem Technology and Guotai Huarong.

Panax Etec operates production facilities in Korea, Malaysia and China. It plans to double the capacity and diversify its client base from existing ones including Samsung SDI.

Dongwha Enterprise said the acquisition is aimed at boosting growth by jumping into the secondary battery market, which is projected to quadruple in six years.

“Panax Etec is taking the lead in Korea in terms of research and development capability for electrolyte production,” Lee Si-joon, managing director of Dongwha Enterprise, said in a statement. “The company won’t face concerns about its reliance on Japanese technology for its production.”

Panax Etec posted an operating profit of 4 billion won and 2.7 billion won net profit in 2018.

By Son Ji-hyoung (consnow@heraldcorp.com)