After Ehwa Diamond, IMM PE eyes Kolon Industries unit in materials push

By Ahn Hyo-jung, The Herald Business

IMM Private Equity has been named the preferred bidder for Kolon Industries' semiconductor and display materials division, accelerating its strategy to build out a portfolio of manufacturing and materials, components and equipment assets. The selection follows a signed deal to acquire Ehwa Diamond Industrial, drawing fresh attention to how the firm has managed to close deals in quick succession.

Investment banking sources said Saturday that IMM PE is expected to sign a memorandum of understanding for the acquisition around mid-July. The transaction covers the printed circuit board materials and display coating solutions businesses within Kolon Industries.

Combined sales from the two divisions are in the 200 billion won ($129 million) range. The PCB materials business broadly encompasses dry film resist, modified polyphenylene oxide and specialty epoxy resins, though the mPPO unit — which has drawn attention as an electronic materials supplier for AI semiconductors — has been excluded from the sale.

The preferred-bidder designation positions IMM PE to accelerate diversification of its manufacturing and materials, components and equipment portfolio through its blind fund Rose Gold No. 5. If the acquisition closes, the fund's dry powder is expected to be largely depleted.

IMM PE has been stepping up its investment activity. In May, the firm signed a share purchase agreement to acquire Ehwa Diamond Industrial — a maker of diamond tools for semiconductor and display manufacturing processes — for around 400 billion won. The deal is working through the Korea Fair Trade Commission's merger filing process, with closing via final payment expected as early as the third quarter.

Beyond Ehwa Diamond Industrial, the firm is expected to add Kolon Industries' core electronic materials business to its portfolio. The move reflects a strategy to actively accumulate high-quality assets in the semiconductor and display upstream industries — assets with reliable cash generation and growth potential that go beyond the firm's traditional investment scope.

IMM PE secured preferred-bidder status even as some later-stage contenders raised concerns about the compressed timeline, including being asked to submit binding offers without sufficient due diligence opportunities. Industry sources say the firm's clear commitment to sector diversification and its swift preparation were the decisive factors.

Significant hurdles remain before the deal can close, however. The transaction is a carve-out — separating a business unit from a large conglomerate rather than acquiring a standalone company — which makes it more complex than a typical buyout. Aligning staff transfers, splitting production facilities and building an independent ERP system are among the many conditions that must be worked out during due diligence to create a structure capable of operating independently after the spin-off.

Having only just secured preferred-bidder status, IMM PE is set to begin selecting an advisory team to lead the detailed due diligence process.