Daebo Magnetic withdraws plan to sell company as shares surge

Daebo Magnetic Co. logo [Courtesy of Daebo Magnetic]

Daebo Magnetic Co., a leading player in electromagnetic filters for batteries in South Korea, withdrew its plans to sell the company as it failed to agree on a sale price after shares in the electric vehicle battery business soared this year.

According to investment banking industry sources on Wednesday, the KOSDAQ-listed company has decided to halt all sale-related activities led by Samjong KPMG, after it failed to narrow differences on the sale price with potential buyers. Daebo Magnetic planned to sell a 45.3 percent stake, which includes 22.26 percent owned by the company’s founder and Chief Executive Officer Lee Jun-gak. He is the largest shareholder of the company.

Daebo Magnetic’s shares trade around 78,000 won ($58.7) per share and its market capitalization stands at around 610 billion won, up more than 25 percent from the beginning of the year. In March, the stock surged to 96,000 won, the highest since it started trading in November 2018, when news of the sale was reported. The value of the stake put up for sale increased by more than 130 billion won during the period.

The sale price was estimated to be around 300 billion won, including the management rights premium. Back in March, multiple candidates expressed their intention to acquire the company during a preliminary bid. Four companies were shortlisted, which included SkyLake Equity Partners, Eugene Private Equity and Hansol Paper.

However, Daebo Magnetic did not select a preferred buyer and decided to cancel the sale. Lee is expected to maintain his management.

Daebo Magnetic was established in 1976 as a supplier of iron and non-ferrous metal removal devices and debuted on the KOSDAQ in November 2018. Its major customers include BTR New Material Group Co., ShanShan Group Co., BYD Co., Samsung SDI Co., LG Chem Ltd. and EcoPro BM Co.

Recently, Daebo Magnetic invested 12 billion won to add equipment for processing materials for EV batteries at its plant in Eumseong, 109 kilometers south of Seoul.