Hahn & Co's K Car Exit and STIC's Refinancing Show Korean PE Firms in Active Portfolio Mode

Two of South Korea’s homegrown private equity houses moved on their portfolios this week: Hahn & Company is completing its exit from used-car platform K Car (KRX: 381970), whose largest shareholder is changing to a consortium led by KG Group, while STIC Investment (KRX: 026890) replaced the lender syndicate behind the acquisition financing it arranged for its stake in battery-materials maker Lotte Energy Materials (KRX: 020150). Neither is a new deal — both are the less glamorous middle and end stages of the private equity cycle, and together they offer a snapshot of how Seoul’s domestic funds are managing money already deployed.

A Used-Car Exit, With a Parting Bonus

Hahn & Company, the Seoul-based buyout firm that has controlled K Car, said it is paying what it calls a “fresh start” bonus to K Car employees as the company’s largest shareholder changes to the KG Group consortium. Payments of this kind at the point of exit are uncommon in the Korean market, where change-of-control transitions are more often a source of workforce anxiety than of one-off compensation.

The transaction is moving through its formal steps. K Car has filed a board resolution to convene a shareholder meeting, the meeting notice itself, and proxy solicitation reference materials with the Financial Supervisory Service’s electronic disclosure system — the procedural sequence that accompanies a change in controlling ownership at a listed Korean company.

The Buyer: A Conglomerate Built on Deals With Funds

KG Group, the acquirer-side anchor, is a Seoul-headquartered conglomerate founded in September 2003 by Kwak Jae-sun, who had co-founded the power plant firm Seil in 1985 before divesting to buy the receivership company Gyeonggi Chemical, the seed of what became KG Chemical. For fiscal 2021 the group reported revenue of 4,983 billion won and net income of 308 billion won.

What makes KG a familiar counterparty for private equity is its track record of transacting with funds on both sides of the table. It completed the Dongbu Steel takeover in August 2019 through a special purpose company alongside Cactus Private Equity — a deal that lifted group assets from 2.23 trillion won at the end of 2018 to 5.256 trillion won. In October 2020, its payments affiliate KG Inicis bought 93.8 percent of Hollys F&B, operator of the Hollys Coffee chain, from IMM Private Equity. And having purchased the Korean KFC franchise from CVC Capital Partners in 2017, the group sold KFC Korea on to Orchestra Private Equity in April 2023. Buying K Car from Hahn & Company extends that pattern: KG has repeatedly served as the strategic buyer that gives Korean and global funds their exit.

New Lenders for a Battery-Materials Position

STIC Investment’s move sits at a different point in the fund lifecycle. The listed asset manager replaced the syndicate of lenders that had provided the acquisition financing from its original investment in Lotte Energy Materials, the copper-foil producer that supplies the battery supply chain. Swapping a lender group mid-hold is typically about terms — pricing, covenants, or maturity — and it indicates a sponsor actively managing the debt side of a position rather than waiting for the original facility to run its course.

Reading the Two Moves Together

The common thread is discipline in the unglamorous phases of private equity: an orderly, even employee-friendly handover at exit in one case, and proactive liability management during the holding period in the other. For Korea’s domestic funds, which compete with global firms for both capital and reputation, how a sponsor leaves a company and how it carries its debt increasingly matter as much as the headline entry deal. K Car’s shareholder meeting process will formalize the ownership change; the terms STIC secured from its new lenders will show up later, in how comfortably it can hold its battery-materials bet.