Sweden’s EQT Partners, one of Europe’s largest private equity firms, has launched the sale of Acuon Capital Corp. and Acuon Savings Bank Co., in what could become one of the largest financial-sector M&A deals in South Korea.
If successful, the transaction would mark EQT’s exit from the Korean consumer finance space six years after it purchased the two smaller financial firms.
The combined sale, which could fetch some 1 trillion won ($690 million), is drawing interest from both domestic financial groups and global private equity investors.
According to investment banking sources on Thursday, EQT Partners is selling its 96% stake in Acuon Capital along with the capital company’s 100% holding in Acuon Savings Bank.
UBS and Citigroup Global Markets have been chosen as lead advisers for EQT.
“EQT is casting a wide net to gauge investor appetite before narrowing down potential bidders,” said a senior investment banker involved in the process.
DAYEA YEON LEADS SALE OF ACUON FIRMS
Acuon Capital, formerly KT Capital, and Acuon Savings Bank, previously HK Savings Bank, were first acquired by US private equity firm J.C. Flowers & Co. in 2015 and 2016, respectively.
UK-based Baring Private Equity Asia (BPEA) bought both companies for about 700 billion won from J.C. Flowers in 2019, and EQT inherited them when it acquired BPEA in 2022.
Dayea Yeon, a partner and head of Private Capital Korea in the EQT Private Capital Asia team, is overseeing the sale of the two Acuon firms. She had also led the earlier BPEA acquisition.
HEALTHIER PLAYERS
Despite a sluggish market weighed down by property-related bad loans, Acuon stands out as a relatively healthy player.
The two companies generated a combined net profit of 33.1 billion won in the first half of this year, following a 76 billion won profit in 2024.
Acuon Capital posted a non-performing loan ratio of 3.3% as of June, while Acuon Savings Bank’s figure stood at 6.4%, both below their industry averages.
Assets under management have also grown steadily.
Acuon Capital’s balance sheet expanded to 4.02 trillion won this year from 3.48 trillion won in 2019, while Acuon Savings Bank’s assets more than doubled to 5.37 trillion won from 2.35 trillion won over the same period.
In terms of assets, Acuon Capital Savings Bank ranks fifth in the Korean savings banking market, while Acuon Capital ranks 17th among the local capital firms.
OPERATING RIGHT IN THE CAPITAL & SURROUNDING REGION
The sale is being closely watched across the financial industry, where consolidation has accelerated amid tightening regulation and rising funding costs.
Market watchers say Acuon’s Seoul-based savings bank is particularly valuable given regulators’ moratorium on new metropolitan-area licenses.
“In the current environment, acquiring a bank with a license to operate in Seoul and the metropolitan area is practically the only way to enter the market,” said a market analyst.
WOORI FINANCIAL MAY BID FOR ACUON FIRMS
Potential bidders could include financial holding firms without a captive capital or savings bank subsidiary, such as Woori Financial Group, which previously explored acquiring the mid-tier SangsangIn Savings Bank.
Mid-sized corporates or rival private equity firms seeking to strengthen their Korean portfolios are also expected to bid for the Acuon firms.
Still, some bankers are skeptical that major financial groups will bid aggressively.
“Korean financial holding firms are under pressure to boost shareholder returns through dividends and buybacks, making it difficult for them to commit a lot of money to a non-core acquisition,” said an executive at a leading banking group. “Strategic synergy is limited, so private equity is more likely to step in.”
