Keystone to close acquisition of semiconductor equipment maker SSP this month

Private equity fund manager Keystone Partners is set to finalize its acquisition of semiconductor manufacturing equipment company SSP by the end of this month.

Investment banking sources said Wednesday that Keystone Partners will complete the final payment for a 100 percent stake in SSP as early as this week, closing the deal. The acquisition covers all shares held by LX Investment and other existing shareholders, with the transaction valued at around 400 billion won ($273 million).

Keystone Partners funded the purchase using undeployed capital — dry powder — from its existing fifth blind fund alongside capital from its newly raised sixth blind fund. The deal extends the firm's portfolio into the semiconductor equipment sector, following recent acquisitions of education platform ClassCard and beauty brand Semo Company.

Keystone Partners has a track record of buyout-and-exit investments across manufacturing, consumer goods and mobility. Its investment in Orion Technology, a maker of marine and automotive electronics components, generated returns of more than three times the original principal upon exit. Its investment in secondary battery parts maker SeA Mechanics, which completed a Kosdaq listing after an internal restructuring, also delivered a strong internal rate of return on exit.

Beyond completed exits, the firm continues to build out its active portfolio. It has acquired airport lounge service provider eBridge and Yeokjeon F&C, the operator of food and beverage brand Yeokjeon Halmae Maekju, and is also managing KAL Limousine, acquired from Korean Air, as a key portfolio asset.

The seller, LX Investment, adds another successful exit to its track record with this deal. The firm is understood to have recovered more than twice its original investment in roughly three years. LX Investment had previously acquired a 100 percent stake in SSP for around 180 billion won in a consortium with M Capital (now MG Capital), with MG Saemaul Geumgo participating as a key limited partner at the time. LX Investment is an investment affiliate of Taejin International, which owns fashion brand Louis Quatorze, and is led by CEO Kim Chung-won.

SSP holds roughly 60 percent of the domestic market for semiconductor ball mount equipment. Ball mount machines are critical tools in the semiconductor packaging process, attaching minute solder balls that connect chips to substrates — a technically demanding application with high barriers to entry. The company also offers a broad product lineup spanning electromagnetic interference shielding equipment, camera module manufacturing systems and factory automation solutions. With overseas sales accounting for more than 60 percent of its revenue, SSP has earned recognition for its competitive technology in the global semiconductor back-end process market.

Earnings growth has been equally sharp. Last year, SSP posted sales of 56.56 billion won and operating profit of 20.36 billion won, up 38.4 percent and 58.5 percent, respectively, from the previous year. With an operating profit margin of 36 percent last year, the company is seen as holding significant potential for further growth in enterprise value.

EY Hanyoung served as sell-side adviser on the deal, while Deloitte Anjin handled accounting due diligence and law firm Yulchon provided legal counsel for the buyer.