July 27, 2023 [The Kore Economic Daily]- The asset manager seeks to sell off UTK at $316 million, 16 times the terminal operators’ EBITDA last year.
Macquarie Korea Asset Management seeks to sell off a tank terminal operator six years after the acquisition, at around 400 billion won ($314.8 million), sources familiar with the matter said on Wednesday.
The Seoul-based investment arm of Macquarie Group Inc. is poised to sell a full stake in United Terminal Korea Ltd. (UTK), which manages tank terminals for liquid cargo like oil. Some major private equity firms are considering acquisition of the asset located in Ulsan, a port city on the southeast coast of Korea.
Macquarie hopes to sell the tank terminal operator at around 400 billion won, 16 times UTK’s earnings before interest, taxes, depreciation and amortization (EBITDA) last year on a consolidated basis. The multiple is average in the Korean tank terminal management deals, according to sources.
UTK unloads stores and ships liquid cargo. It posted 43.3 billion won in revenue and 13.9 billion won in operating profit last year, which respectively rose 7.7% and 10.3% on-year.
Founded in 1998 as a 50:50 joint venture between United Arab Emirates’ state-run Emirates National Oil Company (ENOC) and Korea’s construction conglomerate Taeyoung Group, its full stake was sold to Macquarie at more than 100 billion won via its Macquarie Korea Opportunities Fund (MKOF) III in 2017.
Since the deal, Macquarie has more than doubled the tank terminals’ storage capacity to 468,540 kiloliters. As a bolt-on-acquisition to strengthen its cargo terminal portfolio, the asset manager also bought a 60% stake in Korea’s Onsan Tank Terminal at more than 20 billion won in 2020. The remaining 40% stake is owned by Japanese petrochemical company Nakagawa Bussan Co.
UTK is the last asset remaining in the portfolio of MKOF III, which was created at 745 billion won in 2014. Macquarie is forming MKOF VI with a target size of 1 trillion won and received a 210 billion won commitment from National Pension Service (NPS) to the sixth fund for local private equity investments.
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