IMM PE weathers deal drought with disciplined invest, exit and manage strategy

In a domestic mergers and acquisitions market gripped by a deal drought this year, IMM Private Equity chose to play it straight. Rather than chasing aggressive expansion, the firm zeroed in on quality assets, built flexible exit mechanisms to replenish its war chest, and worked to reshape the fundamentals of its existing holdings.

The firm delivered standout buyout results in the semiconductor materials, parts and equipment space, diversified its exit toolkit from on-market share sales to put option exercises, and shored up its portfolio through a shift to long-term holding structures and management overhauls. In doing so, IMM PE demonstrated again that it remains a force to be reckoned with as one of Korea's first-generation homegrown private equity fund managers — executing the buyout house's core trinity of investment, exit and portfolio management by the book.

The most notable move in IMM PE's investment activity this year has been its push to diversify its portfolio into the semiconductor materials, parts and equipment sector.

The headline deal was the acquisition of Ewha Diamond Industrial, Korea's top diamond tool manufacturer. In May, IMM PE signed a share purchase agreement to acquire a controlling stake of roughly 65 percent held by the founding family for 400 billion won ($294 million). The Korea Fair Trade Commission cleared the deal in July, and the final payment was completed in August without a hitch — a display of both speed and execution discipline.

The acquisition stands out for the firm's ability to identify a high-quality succession asset ahead of the competition in a sluggish M&A market. Ewha Diamond Industrial supplies precision tools across manufacturing industries ranging from construction and automotive to semiconductors and displays, holding the top position in Korea and third place globally. Particularly notable is its financial track record: the company has not posted a single year of losses in its 50-year history. Last year's operating profit of 30.2 billion won comfortably exceeded the five-year average annual operating profit of 21.8 billion won, underscoring its consistent profitability.

IMM PE plans to actively support management efficiency improvements, product portfolio expansion and entry into new markets to strengthen Ewha Diamond Industrial's competitiveness. The firm intends to leverage the company's precision machining technology alongside its North American sales network to solidify its standing in global markets.

The push into semiconductor materials, parts and equipment is still ongoing. IMM PE is currently pursuing the acquisition of Kolon Industries' semiconductor and display materials division. Since being named the preferred bidder in June, the firm has signed an MOU and is conducting due diligence — a sign that it is moving beyond its traditional buyout territory to secure quality assets aligned with market trends at reasonable prices.

IMM PE's exit activity this year is just as noteworthy as its investments. Rather than passively waiting for the right moment to cash out, the firm engineered flexible exit solutions — including share swaps through corporate combinations and the use of contractual options.

Earlier this month, IMM PE sold its remaining 4.07 percent stake in webtoon and web novel platform KidariStudio on the open market, drawing a line under a decade-long investment. The story traces back to a 50 billion won investment for a 20 percent stake in Lezhin Entertainment in 2016. An initial plan to take the company public within three years was derailed by slowing performance, but the tide turned in 2020 when IMM PE executed a comprehensive share swap with KidariStudio. The firm sold a portion of the resulting stake to Daou Data for 28.6 billion won, then sold the 7.3 percent stake it held through a call option in three tranches starting in 2024, completing the full exit.

This exit carries significance beyond a simple share sale: it shows the firm's ability to restructure an off-script investment over a decade and ultimately recover its capital. When the IPO path closed, IMM PE accepted a structural pivot to a target-company merger, used a contractual call option to secure additional shares, and then sold them in stages as market conditions allowed — mobilizing every tool at its disposal to exit without a loss rather than waiting on the market.

In the case of cloud and AI specialist MegaZone Cloud, IMM PE made active use of a put option written into the original investment agreement. MegaZone Cloud raised 800 billion won from Glenwood Credit this year and used the proceeds to buy back portions of the stakes held by MBK Partners and IMM PE — roughly four years after the two managers jointly invested about 450 billion won in the company in 2022.

This exit, too, is significant for the way IMM PE drove the timing actively through a contractual safety net rather than relying on market sentiment alone. Retaining a residual stake also positions the firm to capture additional upside from a future IPO — a precision exit strategy that keeps one door open even as it closes another.

Alongside buying and selling, IMM PE has been working to improve the fundamentals of companies it already holds. Rather than pushing for quick sales, the firm has shifted toward enhancing the long-term value of its portfolio companies. That effort is most visible in its work with Air First and Hanatour Service.

For industrial gas manufacturer Air First, IMM PE is forming a continuation fund, targeting a close in November. Major domestic institutional investors — including pension funds, mutual aid associations, banks and securities firms — are reportedly each considering commitments of at least 100 billion won.

The decision to hold Air First for the long term reflects the favorable semiconductor industry environment and the company's steady earnings growth. With Samsung Electronics and SK hynix among its customers, Air First generates hundreds of billions of won in annual sales and strong operating profit, functioning as a reliable cash cow. Rather than rushing to realize gains under fund maturity pressure, IMM PE's strategy is to continue holding a high-growth asset and maximize its enterprise value over the medium to long term.

For Hanatour Service, whose sale process was recently put on hold, IMM PE has launched a sweeping management overhaul aimed at boosting the company's valuation. Hanatour Service appointed Jo Jwa-jin, former CEO of Lotte Card and a specialist in finance and platform businesses, as its new chief executive — a deliberate departure from the travel industry's traditional leadership pool. The move signals an intent to bring in an outside professional manager to redesign the entire business model and upgrade the company's fundamentals from the ground up, rather than simply managing near-term earnings or selling travel packages.

At the same time, Hanatour Service abolished its existing representative director structure and introduced an executive officer system to strengthen board oversight and sharpen management accountability and expertise. Under Jo, the company plans to accelerate medium- to long-term growth by focusing on three strategic pillars: expanding the premium themed travel market, building out its inbound tourism business for foreign visitors to Korea, and driving AI-powered digital transformation.