Glenwood PE eyes 1.8 trillion won acquisition of DL Group’s prized Cariflex [fn Market Watch]

[Financial News] Glenwood Private Equity, a major domestic private equity firm, is pursuing the acquisition of Cariflex, DL Group’s affiliate that ranks No. 1 globally in medical synthetic rubber, for about 1.8 trillion won based on enterprise value (EV). The preferred bidder was selected on the 4th and an MOU (memorandum of understanding) was signed; the actual SPA (share purchase agreement) is expected to be signed in the first half of next year.
According to investment banking (IB) industry sources, Glenwood PE was selected by DL Chemical, a key DL Group affiliate, as the preferred bidder for the sale of Cariflex and signed an MOU that day. DL Chemical convened its board that day and decided to proceed with the sale. The equity valuation, excluding debt, is estimated at around 900 billion to 1 trillion won. UBS Securities acted as the sale’s lead adviser. Glenwood PE is expected to acquire Cariflex through a co-investment fund centered on its No. 3 blind fund, which was raised at 1.6 trillion won.
Cariflex has about 75% of the global market for latex, a material used in surgical gloves and medical devices. It is a high-value specialty material that does not trigger allergic reactions to natural rubber proteins, with an operating margin in the 20% range. In 2022, annual operating profit reached the 60 billion won range as demand for medical gloves surged when the COVID-19 pandemic hit shortly after the acquisition.
DL Chemical’s main reason for selling Cariflex is to improve its financial structure. Its financial burden grew after it acquired Cariflex in 2022 and then Kraton for about 2 trillion won, while the petrochemical downturn and losses at Yeochun NCC further strained cash flow. At the end of the most recent first quarter, DL Group had net debt of 4.532 trillion won and a debt ratio of about 150%. DL Chemical’s debt ratio is also in the 300% range. The funds it needs for Yeochun NCC’s paid-in capital increase amount to 272.5 billion won.
A PEF industry source said, “Unlike commodity petrochemicals, Cariflex is a business with high barriers to entry and a global oligopoly position,” and assessed it as “an asset that Glenwood PE can use its experience in carve-out investments to expand overseas markets and enhance corporate value at the same time.”
Meanwhile, Glenwood PE has increased the value of businesses by acquiring non-core operations of large conglomerates, including PUCORE and LG Chem’s water treatment business (NanoH2O). Its plan is to take the lead in Cariflex’s global growth in earnest.
Founded in 2014 by three partners who joined forces—CEO Lee Sang-ho, Vice Presidents Jung Chan-wook and Jung Jong-woo—Glenwood PE is an investment firm specializing in carve-out (acquisition of a separated business) deals involving affiliates of large conglomerates.


[email protected] Kang Gu-gwi Reporter