• Technology has been the main driver behind South Korea’s outbound transactions in 2020. The largest outbound deal was SK Hynix’s [KRX:000660] acquisition of Intel Corporation’s [NASDAQ:INTC] NAND memory and storage business for USD 9bn – the largest M&A deal in South Korea history. Meanwhile, Hyundai Motor Group spent around USD 880m to acquire an 80% stake in US-based robotics company Boston Dynamics. Outbound activity from South Korea predominantly headed to the US with 13 deals worth USD 10.73bn – accounting for 62.3% in total outbound deal activity. China ranked as the second largest outbound destination recording seven deals worth USD 2.7bn. MBK Partners, a North Asia focused private equity firm, announced its intent to acquire of all of the outstanding shares it does not own in CAR Inc [HKG:0699], a listed Chinese rental car platform, valuing the company USD 2.17bn including net debt.
• Industrials & Chemicals sector accounted for 33.2% of total PE buyout deal value in FY20, generating USD 3.9bn across 30 deals. Meanwhile, PE exits in the sector generated USD 2.51bn across 17 deals, accounting for 37.2% of total PE exit deal value for FY20. A notable PE deal in the sector was SK E&C’s acquisition of EMC Holdings, a South Korean holding company engaged in environmental services and waste treatment businesses, from Affirma Capital for KRW 1.05trn (USD 886m).
• Private equity activity is expected to rebound this year given the pipelines for exit deals and market recovery from the pandemic. Several global private equity firms including Carlyle, Affinity, Bain Capital, CVC Capital Partners, and KKR, which didn’t invest in South Korea in 2020, are expected to aggressively look for targets in the country in 2021. According to local reports, several PE-owned assets have been recently put for sale, including JobKorea, a job searching platform operator owned by H&Q Korea; W Concept, an ecommerce platform operator for fashion products and Taihan Electric             Wire [KRX:001440], an electric wires and stainless-steel products maker owned by IMM Private Equity; and health supplement maker FND Net owned by Unison Capital.
• Major companies in education and advertising sectors are seeking for acquisitions and investment opportunities to accelerate digitalization following the COVID-19 pandemic. South Korea’s advertising sector, which is dominated by subsidiaries of large conglomerates, are keeping a close eye on acquisition and investment opportunities – particularly overseas – to strengthen their digital marketing capabilities after a surge in demand in digital marketing on smart devices and social media platforms, Mergermarket reported.

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By Tack Kang