SKC, ISC shares fall due to acquisition

Materials company SKC has acquired semiconductor test equipment maker ISC, causing shares in both companies to fall sharply on Monday.

SKC CEO Park Won-cheol, right, signs an agreement with Jeon Je-mo, head of Helios Private Equity, Friday in central Seoul. [SKC]

Materials company SKC will acquire semiconductor test equipment maker ISC, causing shares in both companies to fall sharply on Monday.

The acquisition of the Seongnam-based company is part of a move from SKC to enter the chip component market.

SKC shares fell 4.03 percent to close at 100,100 won ($76) Monday, while ISC plunged 13.6 percent to 49,500 won.

SKC said on Friday it will buy 35.8 percent of the shares owned by Helios Private Equity for 347.5 billion won. It will also invest 175 billion won to buy new shares that ISC will sell through a rights offering, which will raise the total percentage to 45 percent.

The acquisition will be finalized by the end of September, SKC said.

"The massive rights offering may reduce the value of existing shareholders, but it remains to be seen how the company will use these funds as an opportunity to raise this value," Korea Investment and Securities researcher Park Seong-hong said.

Founded in 2001, ISC specializes in making test sockets for chipsets, a key component in semiconductor post-processing. ISC is the first to commercialize a test socket made with silicon rubber, and owns more than 80 percent of the memory chip test socket market, according to SKC.

SKC has been bolstering its efforts to transform a major part of its business portfolio from chemicals to components sectors, with a focus on materials for secondary batteries and semiconductors.

SKC also owns 81 percent of Absolics, a Georgia-based chip packaging subsidiary that makes glass-based semiconductor substrates. Glass substrate is a thin layer of glass on which processing and memory chips can be mounted together to create the brain of a computing system. The material reduces the space required for a multi-chip package, allowing more chips to be packed into a device.

BY SARAH CHEA [chea.sarah@joongang.co.kr]