KCGI and Mirae Asset Complete Payment for New Shares of Global No.1 Coil Manufacturer

Deal Closed in Five Months After Preferred Bidder Selection
Project Fund of 300 Billion KRW Established

The consortium composed of KCGI and Mirae Asset Global Investments' private equity (PE) division announced on the 5th that it has completed its investment by paying $200 million (approximately 290 billion KRW) for new shares in Essex Solutions, the world's No. 1 magnet wire company.

With this investment, the consortium acquired approximately 21.1% of the shares of Essex Solutions, an overseas affiliate of LS Group. This values Essex Solutions at $950 million (approximately 1.4 trillion KRW).

Essex Solutions is the global No. 1 magnet wire manufacturer with bases across North America, Europe, and Asia. Magnet wire is a material that plays a key role in the mutual conversion of electrical and mechanical energy. As special magnet wire used in electric vehicle drive motors and ultra-high voltage transformers has become a core material in the industry, Essex Solutions is recognized for possessing the top technology in this field. Currently, it holds the No. 1 market share in the North American special magnet wire market.

Essex Solutions plans to select an underwriter within this year and proceed with an initial public offering (IPO). In addition to listing on the KOSPI, it is also considering overseas listings due to strong interest from local U.S. investment banks (IBs). Essex Solutions is expected to generate more than $300 million in EBITDA by 2030.

Earlier, after being selected as the preferred bidder in August last year, KCGI overcame difficult conditions such as sharp exchange rate increases due to political instability and successfully completed the large-scale investment in about five months. This was possible by minimizing risks through cooperation with Mirae Asset Global Investments, the co-executive general partner of the PE fund.

During this process, the consortium established the ‘KCGI-Mirae Asset Global Energy ESG Private Equity Fund (PEF),’ and the core management team of the PEF consists of five members: KCGI’s CEO Kang Sung-bu, Vice CEOs Jung Joon-taek and Lim Hyun-chul, and Mirae Asset Global Investments’ Head Bae Jung-gyu and Team Leader Gong Young-hyun (three from KCGI and two from Mirae Asset). The PEF’s limited partners (LPs) mainly include the Teachers’ Pension, MG Saemaeul Geumgo, and Korea Securities Finance, who previously participated in KCGI’s investment in LIG Nex1 and achieved high returns.

Essex Solutions plans to use the $200 million raised in this pre-IPO funding as investment capital for growth this year and next. Subsequently, it intends to use funds raised through the IPO to realize an overwhelming competitive edge within the magnet wire industry.

A KCGI official stated, “Essex Solutions, which has firmly established itself as the undisputed No. 1 company in the global magnet wire market, will continue to strengthen its position as an industry leader through ongoing investments in production capacity (CAPA) expansion and research and development (R&D), and we will continuously cooperate with Essex Solutions and LS to lay the foundation for achieving a super-gap.”

He added, “We actively sympathize with LS Group’s selection of the battery, electric vehicle, and semiconductor (Ba·Jeon·Ban) businesses as future growth engines through ‘Vision 2030,’ and we plan to actively support LS Group’s securing of new growth engines in various ways.”