Investment firms Brookfield Asset Management and KKR could be potential bidders to buy South Korea’s third-biggest industrial gas supplier, DIG Airgas, from Macquarie Asset Management in a transaction that could be worth up to $3.6 billion, Reuters reported on Tuesday, citing sources familiar with the development.
Earlier this year, Macquarie put DIG Airgas up for sale and has already hired JP Morgan and Goldman Sachs to manage the sale. The seller expects to receive non-binding bids for the industrial gas company as soon as this month, according to Reuters’ sources.
Apart from Brookfield and KKR, infrastructure funds including I Squared Capital and Stonepeak, as well as French gas supplier Air Liquide and U.S.-based gas and chemical firm Air Products, have expressed interest in potentially bidding for DIG Airgas, the sources added.
Macquarie expects a potential sale to value the South Korean firm at 18-20 times the core earnings, which are $170 million-$180 million, according to the people who spoke to Reuters.
In 2019, Macquarie bought DIG Airgas, which was then named Daesung Industrial Gases, from Asian private equity firm MBK Partners for the equivalent of just over $2 billion. The company was renamed to DIG Airgas Co., Ltd. in 2021.
The firm now known as DIG Airgas was established in 1979 and has large-scale air separation units (ASU) and specialty gases and gas equipment manufacturing facilities in major industrial complexes in South Korea.
DIG Airgas produces a wide range of gases and related products: all types of industrial gases, specialty gases for the electronic industry, ultra-high purity gases, standard gases, precise gas mixtures, medical gases, and gas plants.
Samsung Electronics Co. is one of DIG Airgas’ customers in South Korea.
Early this year, the Korea Economic Daily reported that South Korea’s largest steelmaking group POSCO Holdings Inc., and private equity firms such as KKR & Co. and Carlyle Group are expected to bid for DIG Airgas.
By Tsvetana Paraskova for Oilprice.com
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