[Edaily Marketin Hur Jieun Reporter] Nexflex, a manufacturer of flexible copper-clad laminates (FCCL), is set to be acquired by Busan Equity Partners (Busan EP), a domestic private equity fund (PEF) manager. The transaction value is estimated to be around 900 billion won, based on a 100% stake. The seller, MBK Partners, is expected to remain a shareholder of Nexflex by reinvesting in a 17% stake following the sale.

According to investment banking (IB) industry sources on the 13th, MBK Partners signed a share purchase agreement (SPA) with the Busan EP consortium the previous day to sell controlling interest in Nexflex. Both parties finalized negotiations on the transaction price and acquisition structure before completing the agreement. Deutsche Bank is acting as the lead advisor for the Nexflex sale.

In this transaction, Nexflex’s sale price was set at around 900 billion won. MBK Partners plans to reinvest a portion of the proceeds to ultimately secure a 17% stake in Nexflex. Accordingly, the Busan EP consortium will hold the remaining 83% stake.

MBK Partners’ reinvestment is seen as a move to ease the Busan EP consortium’s burden in raising acquisition funds. This is because if the existing major shareholder reinvests a portion of the sale proceeds, the amount of equity capital that the acquiring party must raise from new investors can be reduced. MBK Partners, too, will be able to recoup its investment through the sale of management control while also anticipating additional returns from Nexflex’s future increase in enterprise value.

Busan EP has been pursuing the acquisition of Nexflex since early this year. Although it secured exclusive negotiating rights last February, it was unable to finalize the main agreement due to difficulties in securing funding. It is reported that Busan EP re-entered the bidding process after MBK Partners resumed the sale through a competitive bidding process.

Busan EP initially formed a consortium with TaekwangIndustrial, ITEK, Inc., and Shinhan Investment Securities, but it restructured its financing plan after TaekwangIndustrial withdrew from the acquisition race. Recently, the likelihood of the deal closing has increased as the acquisition financing arrangers—including Shinhan Investment Securities, DB Securities, and Daol Investment & Securities—have completed approval from their internal investment review committees.

Meanwhile, Nexflex is South Korea’s leading manufacturer of FCCL, a key material for flexible printed circuit boards (FPCBs) used in smartphones and other devices. It originated as the FCCL business unit of SK Innovation and was acquired by SkyLake Equity Partners in 2018. Subsequently, MBK Partners acquired a 100% stake in the company in 2023 for approximately 530 billion won.

Last year, Nexflex posted revenue of 269 billion won and operating profit of 75 billion won. These figures represent increases of approximately 65% and 83%, respectively, compared to the previous year. MBK Partners increased the company’s enterprise value based on improved performance following the acquisition and is now set to recoup its investment through this transaction after approximately three years. The equity value of Nexflex as assessed in this transaction is approximately 1.7 times the value at the time of the 2023 acquisition.