Korea’s KCC plans to list subsidiary Momentive in the U.S. this year

[Courtesy of KCC]

KCC Co., South Korea’s biggest construction material maker, plans to list Momentive Performance Materials Inc., a U.S. chemical company which the conglomerate acquired in 2019, on the U.S. stock market as early as this year.

Momentive, the world’s third-largest silicon maker, is expected to be valued at more than $4.5 billion if it goes public. Attention is focused on whether it will be an example of a successful listing of a foreign company acquired by a Korean company on the U.S. stock market.

According to investment banking industry sources on Sunday, Momentive has recently begun the process of selecting underwriters with the goal of listing on the New York Stock Exchange as early as this year. The company has reportedly received presentations from local and foreign investment banks and is planning to select two or more underwriters.

In 2019, KCC along with private equity firm SJL Partners LLC and Wonik QnC Corp., which designs and produces quartz products used for semiconductor, acquired MOM Holding Co., the parent company of Momentive, for $3.1 billion, the largest acquisition by a Korean company at that time. Since then, KCC has managed Momentive, and Wonik oversees Momentive Technologies, which produces quartz used in the semiconductor manufacturing process.

In 2021, KCC sold its silicon-related subsidiaries to Momentive, raising its stake to 60 percent from 50 percent plus one share. Afterward, both KCC and SJL reorganized their portfolios focusing on high value-added products and succeeded in raising Momentive’s earnings before interest, taxes, depreciation and amortization (EBITDA) to $450 million in 2022 from $300 million in 2018. According to KCC’s business report last year, MOM Holding‘s sales reached 3.71 trillion won ($2.79 billion)

Momentive, formerly GE Silicones, is one of the world’s top three silicon companies. The company is also famous as Neil Armstrong, the first man to walk on the moon, took the first human step on the moon wearing shoes manufactured by the company in 1969. The market expects Momentive‘s corporate value to reach more than $4.5 billion after going public.

The investment banking industry is paying attention to whether MPM’s listing on the U.S. stock exchange could revitalize the local IPO market, which has been stagnant in the aftermath of interest rate hikes that began last year. This would be the first listing by a Korean company in the U.S. market since e-commerce company Coupang Inc.’s 100 trillion won debut in 2021. The industry is hopeful that KCC’s listing of Momentive will give impetus to companies preparing for listing on the U.S. market, such as Naver Webtoon.