HPSP Semiconductor Packaging Company for Sale: Aiming for Record Profits in Trillion Won Range

“The biggest big fish in the first half of this year was sold.”

HPSP, a semiconductor manufacturing company known as the ‘Korean version of ASML’, has been put up for sale. As the 8th largest KOSDAQ company with a market capitalization of KRW 3.6159 trillion (based on the closing price on the 15th) has been put up for sale, it is expected to be a welcome relief to the domestic M&A market, which has been unstoppable. over the past two years.

HPSP is a company that manufactures and supplies heat treatment (annealing) process equipment necessary for the entire semiconductor process. As semiconductor processes become more refined, interface defects appear on the surface of semiconductor wafers, and HPSP provides an annealing mechanism that eliminates them. HPSP monopolizes the high pressure hydrogen annealing equipment market.

Sales, which won 25.1 billion in 2019, rose directly to 179.1 billion won in 2023, four years later. Operating profit also increased almost tenfold, from 9.9 billion won in 2019 to 95.2 billion won last year.

HPSP’s operating profit ratio last year reached 53%. HPSP is considered a valuable machine and equipment company in the semiconductor field. It is also called the ‘Korean version of ASML’ compared to the Dutch ASML, which monopolizes semiconductor exposure equipment and is known as ‘Super Eul’ in the industry.

According to the investment banking (IB) industry on the 15th, Crescendo Equity Partners (hereinafter referred to as Crescendo) began selecting a lead manager from among the leading global IBs for the sale of HPSP.

Crescendo, the sales side, acquired HPSP in 2017 by spending about 10 billion won through ‘Presto No. 6 Private Equity Partnership (hereinafter referred to as Fund No. 6)’. At the time, Fund No. 6 stake of 51% in HPSP, but in July 2022, when HPSP was listed on the KOSDAQ market and a free capital increase, the stake fell to 39%.

It is believed that the decision to sell Crescendo was because he believed that it was an appropriate time to realize profits. Thanks to the recent semiconductor boom, HPSP’s stock price has more than doubled in one year. There is still time for the fund to mature, but since the holding period is over 7 years, it is explained that the sale was initiated during the semiconductor boom.

If the sale is successful this time, a huge profit is expected that has never been seen in the domestic PE industry.

According to the industry, Crescendo obtained HPSP by raising money from some LPs (institutional investors) without loans (acquisition financing) during acquisition in 2017. It is JLC Partners, 100% owned by Chairman Lee Jun-ho, the founder of NHN, and two HB Group affiliates (HB Solution and HB Technology) are the main LPs. A business official explained, “If this sale goes through, we will make a trillion dollar profit by investing 10 billion won,” he said, “This is the biggest result in the history of domestic private equity funds.” “

The market predicts interest from financial investors such as domestic and foreign semiconductor companies, including Samsung Electronics and SK Hynix, and global private equity funds (PEFs).

HPSP came from the Poongsan Microtech (PSMC) equipment business team, a subsidiary of Poongsan. In 2009, we first delivered ‘Geni’, a high pressure hydrogen beta annealing equipment, to a US system semiconductor customer.

However, ownership changed when Poongsan Group sold it to private equity fund Crescendo in 2017. Crescendo is a PEF management company created with the support of Chairman Peter Thiel, known as the ‘PayPal Godfather’ .’

However, some analysts say that the price of HPSP is a bit expensive. Another IB business official said, “There is a perception in the market that some semi-generic stocks are overvalued,” and “in the case of HPSP, it may be difficult to complete a transaction unless the redemption price is lowered.” “

In the market, since the stock price has doubled in the past year, some people think it is right to sell it based on the current market capitalization (about 3.6159 trillion won) rather than add to the price for management rights.