November 28, 2024

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SK Group Chairman Chey Tae-won shakes hands with EQT Partners Chairman Conni Jonsson at SK Group headquarters in Jongno, central Seoul on Dec. 3. (SK Group)

EQT Partners, a private equity fund operated by Sweden’s largest conglomerate, the Wallenberg Group, is expected to acquire SK Shieldus, a South Korean security firm, for about 3 trillion won ($2.27 billion) sources said Monday.

EQT Partners is expected to sign the deal this week to purchase a 30 percent stake in SK Shieldus from the top shareholder SK Square, which holds a 63.13 percent stake. SK Square is the investment arm of South Korea’s No. 2 conglomerate SK Group.

The Swedish firm is expected to acquire an additional 36.87 percent of shares from a consortium led by Macquarie Korea Asset Management.

SK Square Chief Executive Officer Park Jung-ho is expected to announce the deal at the Mobile World Congress, the world’s largest mobile tech show, that kicks off this week in Barcelona.

Even after the ownership change, sources said, SK Square is likely to operate the company together with EQT Partners, which means no drastic changes to its management, such as leadership reshuffles or employee restructuring.

In an email to staff in November, SK Shieldus President Park Jin-hyo said, “The new partnership will pursue joint management (of the company) by SK and EQT upon strong request from the partner.”

"The cooperation with SK-affiliated brands will not change."

SK Square CEO Park had also said last year that the company weighed the EQT’s proposal for joint management would be better than going public for SK Shieldus.

Changing the company name would not be considered until the agreement is signed, according to sources.

SK Shieldus previously had sought to go public in May last year. But the plans were reportedly scrapped as they started talks with EQT Partners on the possibility of joint management in November.

SK Shieldus, which is Korea's second-largest physical security service firm accounting for about 30 percent of the market, has been valued at up to 5 trillion won by SK Square, with a net debt of 2 trillion won. S-1, an affiliate of Samsung Group, leads the market with a 50 percent market share.

The Korean security service firm was established in 2021 after SK Infosec, an information security subsidiary of SK Group, merged with ADT Caps, which was a subsidiary of SK Telecom at the time. The company came about to become an affiliate of SK Square in 2021, when SK Telecom carried out a spinoff.

SK Telecom and the consortium led by Macquarie Korea Asset Management acquired ADT Caps in 2018, for 2.97 trillion won, including net debt of 1.7 trillion won.

Some in the market have suggested SK Shieldus will expand its business into Europe following the EQT Partners' stake acquisition. The Swedish firm purchased Securitas Direct, an alarm monitoring company and a subsidiary of Sweden’s largest security service firm, in 2008 and later sold off the company after retrieving the investment in 2011.

The investment organization also bought shares of Israeli cyber security firm CYE last year, securing control over management.

It currently manages 210 billion euros ($222 billion) in assets.

The family-run Wallenberg Group represents 30 percent of Sweden's gross domestic product.

By Jo He-rim (herim@heraldcorp.com)