Seoul-based Kamur Private Equity has signed a definitive agreement to sell a majority stake in South Korean industrial cutting tool manufacturer JJ Tools Co. to Blackstone, according to investment banking sources on Wednesday.
With the deal, Kamur retrieved more than twice its investment, including dividend income, six years after buying the company at 200 billion won ($143 million). The exact deal size was not disclosed.
Blackstone confirmed the purchase of JJ Tools, but did not identify its seller.
“JJ Tools is an industry-leading business in one of our key investment themes for private equity Asia – valued-added industrials,” Kyungmin Song, principal at Blackstone Private Equity, said in a press release on Tuesday.
“We seek to .. support JJ Tools in becoming the top pan-Asian consolidator in the cutting tools sector,” he added.
Established in 1997, JJ Tools specializes in high-precision cutting tools, including carbide end-mills, thread mills and drills, used in various industries spanning semiconductors, engineering, automobiles, aviation and medical.
It boasts a steady stream of cash flow and high profit margins. In 2023, the company earned 27.4 billion won in operating profit on sales of 55.9 billion won, half of which was derived from overseas markets.
Its operating profit margin stood at 49.0% in 2023, with a net profit of 22.7 billion won.
Founded in 2018, Kamur PE focuses on buyout deals of small and medium-sized enterprises in South Korea. Since its investment in JJ Tools, it led its global expansion and technology development.
JJ Tools founder and Chief Executive Park Jong-ik will maintain a stake in the company and continue to get involved in its management.
Samjong KPMG managed the deal.
By Jong-Kwan Park
pjk@hankyung.com
Yeonhee Kim edited this article.
