SK Shielders, Ultimately Withdraws IPO... Unable to Overcome Overvaluation Controversy

[Asia Economy Reporter Jang Hyowon] SK Shieldus, which had attracted attention as a major KOSPI listing, has withdrawn its IPO. This is analyzed to be due to the unstable market conditions and controversy over the overvaluation of the offering price, resulting in unsatisfactory demand forecast outcomes.

According to the Financial Supervisory Service's electronic disclosure on the 6th, SK Shieldus submitted a withdrawal report for its listing. Previously, SK Shieldus conducted a demand forecast for institutional investors over two days, from the 3rd to the 4th. The desired offering price band was 31,000 KRW to 38,800 KRW, aiming for a market capitalization of about 3.5 trillion KRW.

However, according to the investment banking (IB) industry, many institutional investors expressed investment intentions at the 20,000 KRW level, below the desired offering price, during the actual demand forecast. The corporate value was thus evaluated at around 2 trillion KRW, about 1 trillion KRW lower than expected.

This is interpreted as due to the controversy over the overvaluation of the offering price. When SK Shieldus initially submitted its securities registration statement, it calculated corporate value by applying the enterprise value to EBITDA (EV/EBITDA) multiples of U.S. cybersecurity and convergence security companies.

SK Shieldus's main businesses include physical security, cybersecurity, and convergence security. The business with the highest sales proportion is physical security, accounting for 59% as of last year. However, since physical security is a traditional industry with a low EV/EBITDA, SK Shieldus selected U.S. companies with high EV/EBITDA in cybersecurity and convergence security as its peer group.

For example, competitor S-1 has an EV/EBITDA of about 5 times, while U.S. companies range from 20 to 30 times. Accordingly, SK Shieldus applied an average EV/EBITDA multiple of 16 times. After the overvaluation controversy arose, the peer group was changed to companies like Taiwan's Secom, but the offering price remained unchanged.

SK Shieldus stated, "While pursuing the listing for several months, the uncertainty of the global macroeconomy intensified, sharply dampening investor sentiment, preventing a full evaluation of our corporate value," adding, "We will further expand our growth businesses such as cybersecurity and convergence security to strengthen competitiveness."

This content was produced with the assistance of AI translation services.