Keistone Partners buys Hansung Green Factory for $30.7 million

[Courtesy of Keistone Partners]

Seoul-based private equity investment firm Keistone Partners has secured management control of Hansung Green Factory Co., the country’s leading individual quick freezing (IQF) food provider.

According to sources on Thursday, Keistone Partners signed an agreement to acquire an 80 percent stake in Hansung Green Factory, including common shares and convertible bonds, for 40 billion won ($30.7 million).

Hansung Green Factory, an agricultural venture founded in 2016 by current Chief Executive Officer Lee Seok-jae, owns 6,600 square meters of land in Eumseong, south of Seoul, as well as IQF process-related equipment and a freezer warehouse. The company posted 16.4 billion won in sales and 1.8 billion in operating income before amortization last year.

Company founder Lee will continue to hold a 20 percent stake in Hansung Green Factory and will form a joint board of directors with Keistone Partners. Keistone Partners will allocate about 27 billion of its investment to buy the company’s convertible bonds to expand the IQF production facility on the company’s idle land.

Hansung Green Factory has been growing rapidly, about 35 percent annually over the past three years and is in urgent need of funds for additional facility investment.

IQF is a technology that maintains the freshness of vegetables through ultra-fast freezing below minus 40 degrees Celsius, which can keep the quality of vegetables fresh than ordinary freezing around minus 20 degrees Celsius.

In Korea, the market for IQF technology has been growing rapidly in recent years and Hansung Green Factory has strengths in vegetable blanching IQF processing technology. The company already supplies vegetables to more than 100 food customers in Korea, including large and medium-sized enterprises.

Following the acquisition, Keistone Partners plans to launch its own value creation program (VCP) to consolidate the company as the number one player in the local IQF refrigeration market.

“As the volatility of vegetable prices increases due to abnormal temperatures such as droughts, heat waves, and rainy seasons, while the meal kit market grows significantly, we believe that the vegetable IQF market will grow together with the demand for fresh vegetables at stable prices,” said Keistone Partners.

Keistone Partners is one of Korea’s leading mid-sized PEF with about 2 trillion in assets under management.