Taeyoung Group affiliate ECORBIT up for sale in $2.2 bn deal

[Courtesy of ECORBIT Corp.]

ECORBIT Corp., an environmental company under South Korea’s Taeyoung Group, is up for sale in a deal worth about 3 trillion won ($2.2 billion).

According to investment banking industry sources on Monday, sales advisers UBS Group AG and Citigroup Global Markets Inc. sent out investment memorandums to potential buyers.

About 20 buyers are reportedly interested in the deal, including strategic and financial investors. The sales advisers are expected to receive preliminary bids in May.

Industry insiders noted that a notable point in the IM is the inclusion of seller financing support. The state-run Korea Development Bank (KDB) is reportedly considering providing seller financing amounting to 1.5 trillion won.

This means that loans will be provided at lower interest rates than other banks.

For buyers, this can reduce their actual equity investment, making the acquisition more attractive. The seller can also increase its valuation by providing seller financing incentives.

ECORBIT is jointly owned by TY Holdings Co, the holding company of Taeyoung Group, and global private equity firm KKR & Co. Inc., each holding a 50 percent stake.

TY Holdings borrowed 400 billion won from KKR in January 2023, using its 50 percent stake in the company as collateral, to fund its subsidiary, Taeyoung Engineering & Construction Co. (Taeyoung E&C), which was facing a liquidity crisis.

The 400 billion won borrowed from KKR was lent to Taeyoung E&C, which was later converted into equity for the troubled construction company at the request of its creditors during the workout process.