SKC : sells off its film business, heading towards a global ESG materials solutions company

SKC concluded an agreement on May 8 with a local private equity investment firm Hahn & Company ··· the KRW 1.6 trillion transaction to be finalized before the yearend.

Intensive investment on business model innovation focused on rechargeable battery, semiconductor and eco-friendliness··· driving the transition to a new company identity.

SKC (President: Woncheol Park) is selling off its film/processing business (hereinafter 'film business') to Hahn & Company, South Korea's top-tier private equity investment firm. SKC has been promoting business model innovation since 2016 focusing on rechargeable battery, semiconductor and eco-friendliness, and the Company will set off a journey towards a global ESG materials solutions business.

SKC held a board of directors meeting on June 8 and decided to divide and sell its film business, and, on the same day, the Company concluded a stock sale and purchase agreement with Hahn & Company. The transaction amounts to KRW 1.6 trillion and includes the sale of SKC's film business, SKC's film processing subsidiary SKC hi-tech & marketing and operations in the U.S. and China. SKC plans to finalize required procedures including the general meeting of shareholders and business division to have the transaction closed in Q4 this year.

SKC's film business is engaged in manufacturing products used for advanced IT devices such as displays and mobiles as well as other products for industrial use. SKC's film business has led the South Korean film industry and represents many first-in-history moments including the first PET film development in 1977 and first video tape development in 1980. In the 2000s, the business supported industrial development by shifting its key product to films for display, and more recent focus has been devoted to advanced products for mobile devices such as smartphone. The business has been showing an ongoing growth, recording KRW 1.13 trillion in sales and KRW 68.9 billion in operating income last year.

SKC's decision to sell off the film business was made to clarify its identity as a global ESG materials solutions company centered around rechargeable battery, semiconductor and eco-friendliness. Although the film business is demonstrating continuous growth in sales and operating income based on the global competitiveness, the business is not aligned with SKC's strategic orientation. It was therefore determined to sell off the film business to an appropriate buyer that will further the business growth and development.

Hahn & Company is the largest private equity investment firm in South Korea which controls and operates a fund worth approximately KRW 13.5 trillion. Since the foundation in 2010, Hahn & Company has acquired 30 blue-chip companies in South Korea to discover new growth engines and was the first to introduce a 'bolt-on strategy' in the domestic PE industry to successfully raise corporate value of the acquired companies through radical reform. Hahn & Company remained most active in business even during the COVID-19 pandemic by, for example, closing a deal of around KRW 3 trillion, building upon responsible business attitude and cordial investor relations. It also has plans for SKC's film business to further improve the global competitiveness and develop it into a company of sustainable growth.

Taking advantage of the financial resource made available from this deal, SKC will invest in the business of future growth engine currently in progress as well as new business areas to be added in the future. Through this, SKC seeks to clarify its identity as a global ESG materials solutions company. SKC's has been making continued efforts to secure financial resources for growth including a financial collaboration agreement for KRW 1.5 trillion concluded last year with KDB Bank. Now, this KRW 1.6 trillion deal will be added to SKC's financial resources with which SKC can further increase shareholder value and expand investment activities.

An SKC executive said, "SKC will establish a business structure focused on rechargeable battery, semiconductor and eco-friendliness to set a foundation for Leap & Reap through intensive investment in global expansion and future growth," and added, "SKC will take a leap to become South Korea's representative global ESG materials solutions company." [End of document]