Valenbergi Family Embraces SK Shielders... SK Square Joint Management

Becoming a Global Total Security Company
SK Square's First Big Deal Since Launch... Enhancing Shareholder Value

[Asia Economy Reporter Oh Su-yeon] EQT Infrastructure, a global investment company of Sweden's Wallenberg family, is acquiring SK Square's security company SK Shieldus with an investment of about 2 trillion KRW. EQT and SK Square will jointly manage the company as the first and second largest shareholders respectively, aiming to grow it into a 'Global Total Security Company.'

On the 28th (local time), Park Jung-ho, Vice Chairman of SK Square, held a press conference in Barcelona, Spain, to announce this fact.

Park Jung-ho, Vice Chairman of SK Square, announced the joint management plan of EQT-SK Square's SK Shieldus at a meeting in Barcelona, Spain, on the 28th (local time).
[Photo by SK Square]

EQT will acquire some of SK Square's shares and the entire stake of the Macquarie Asset Management consortium for about 2 trillion KRW, and additionally acquire new shares to become the largest shareholder (68.0%) of SK Shieldus. SK Square transferred part of its existing SK Shieldus shares to EQT, securing 864.6 billion KRW in new investment funds. Going forward, SK Square will hold 32.0% (share value about 1 trillion KRW) as the second largest shareholder and jointly manage SK Shieldus.

With this acquisition, SK Square has nearly doubled its corporate value from the 3 trillion KRW level to the 5 trillion KRW level in five years since acquiring ADT Caps in 2018. Moreover, it demonstrated its presence as an investment specialist company by successfully closing a big deal within just over a year since its launch. Vice Chairman Park said, "With a good partner like Macquarie, we worked for four years to grow a company valued at 1.2 trillion KRW to nearly 3 trillion KRW," adding, "In a situation where growth is expected in unmanned stores and converged security, we invited EQT, which has great interest and insight, as the next shareholder to grow the current 5 trillion KRW company to 7 or 8 trillion KRW."

SK Square plans to proceed with the Fair Trade Commission's corporate merger review and various government approval procedures within the third quarter in collaboration with EQT. EQT intends to expand its investment in Korea, centering on 25 investment experts from its Korean branch.

Vice Chairman Park stated, "Starting with the first full investment cycle performance since SK Square's launch, we will actively enhance shareholder value," and added, "This will be an opportunity to raise the global competitiveness of the domestic security industry."

SK Square and EQT Joint Management... Global Expansion

SK Square and EQT will jointly manage SK Shieldus with the vision of growing it into a 'Global Total Security Company.' They will issue new shares worth 200 billion KRW this time to use as investment funds for new businesses such as unmanned stores and AI-based security services.

Through synergy with overseas security companies already held by EQT, they will promote ▲ acceleration of digital transformation ▲ expansion of subscription-based cyber and converged security business models ▲ innovation of physical security business models.

The company name will remain unchanged. Although there are concerns about job insecurity, Vice Chairman Park personally assured employment succession. He said, "While creating additional growth for SK Shieldus in Korea, we must also develop a strategy to enter the global market with EQT."

Big Deal Achieved Just Over a Year After Launch... What’s Next for SK Square?

Originally, SK Square planned to IPO SK Shieldus last year, but withdrew the listing plan due to the global economic downturn and revised its strategy. Other subsidiaries like 11st will also change their strategies similar to SK Shieldus.

Furthermore, they view the crisis caused by the economic downturn as an opportunity. Vice Chairman Park said, "As an investment company, SK Square's philosophy is to use discernment in a downturn like this to find opportunities at better than fair value." He pointed to the semiconductor industry as an area of keen interest.

SK Square was launched in November 2021 through a spin-off from SK Telecom. Vice Chairman Park cited the withdrawal of the IPO and the inability to complete a full year’s financial statements as regrets over the past year, which prevented defensive actions such as share buybacks in the market.

At the time of launch, Vice Chairman Park set a goal to increase the corporate value from 25 trillion KRW to 75 trillion KRW by 2025. Although SK Square’s net asset value has decreased due to market changes, this goal remains unchanged. He said, "For now, we are not revising the 75 trillion KRW target," adding, "I believe DRAM will recover faster than NAND. If the ChatGPT competition starts from major platforms, purchases will increase. If we can provide confidence in growth, we do not need to revise the 75 trillion KRW target."

Vice Chairman Park visited the Mobile World Congress (MWC) 2023 venue the day before and toured the SK Telecom exhibition hall. Regarding network usage fees, one of the main topics at this MWC, he said, "Super platform operators use all network capacity but are hidden behind network neutrality. YouTube and Netflix combined use more than 30% of our network," adding, "Deutsche Telekom in Europe proposed bringing network data to form a study group together."

On AI, which became the biggest topic at this MWC due to ChatGPT, he said, "Ultimately, all computers will be connected," and added, "Society must prepare systems for these changes. The reason SK Telecom is preparing the AI agent A.Dot is to transform our data into ChatGPT-like models before hyperscalers overwhelm us, to advance and coexist with them (through AI)."

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