(Photo= Yonhap news)

[Alpha Biz= Reporter Kim Sangjin] SK Group is currently pursuing the sale of SK Specialty, the world’s leading semiconductor specialty gases company. Hahn & Company, a major domestic private equity firm, has emerged as a leading candidate for the acquisition. According to Maeil Business and investment banking sources on the 2nd, SK Inc., the holding company of SK Group, is negotiating the sale price with Hahn & Company, with the estimated transaction amount reaching around 4 trillion won.

As of the first half of this year, SK Inc.’s total debt stands at 12.3998 trillion won based on standalone financial statements. Selling SK Specialty for 4 trillion won would reduce SK Inc.’s debt by approximately one-third in a single transaction.

This potential sale is attracting significant attention as it represents SK Group’s first major move towards reducing its debt following a restructuring of its business operations.

In July, Hyosung Chemical’s specialty gas division, the world’s third-largest specialty gas company, was valued at 1.3 trillion won. SK Specialty, however, has an annual EBITDA of about 250 billion won, roughly three times higher than Hyosung Chemical’s division.

SK Specialty produces specialty gases used in semiconductor and display panel manufacturing. It leads the global market with a 40% share in trifluorides (NF3), used for cleaning residuals on semiconductor wafers. It also competes globally in hexafluorotungsten (WF6) and monosilane (SiH4). Major customers include SK Hynix and Samsung Electronics.

For the first half of this year, SK Specialty reported sales of 355.3 billion won and an operating profit of 54.4 billion won. SK Group affiliates account for about 31% of SK Specialty’s total sales (as of last year).

SK Specialty was originally established as OCI Materials in 1982. SK acquired a 49.1% stake in OCI Materials from OCI for 481.6 billion won in November 2015. The company was renamed SK Materials and later became a subsidiary of SK Inc. following a split three years ago.

The sale is seen as part of SK Group’s strategy to reduce its holding company’s borrowings. In July, SK Group announced a plan to generate 30 trillion won in free cash flow over three years and manage its debt ratio below 100% as part of its management strategy.

 

 

 

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