Seoul-based private equity house Hahn & Co. on Wednesday agreed to sell its 40 percent stake in IT system integrator Ssangyong Information & Communications for 27.4 billion won ($23 million) by April, in a move to offload noncore businesses of its portfolio firm Ssangyong Cement Industrial.

According to regulatory filings Wednesday, the new shareholder group, composed of information technology system integrator Itcen and its affiliate Comtec Systems, will buy the stake for 1,695 won per share -- nearly at a market price -- through a special purpose company. The stake purchase deal is expected to close on April 23.

The acquirer paid a deposit of 2.7 billion won for the deal Wednesday.

Hahn & Co. will remain a minority shareholder of Ssangyong I&C, controlling its 9.84 percent.

This came in line with Hahn & Co.’s move to consolidate Ssangyong Cement Industrial’s cement and ready-mix concrete production business. Hahn & Co., Korea’s second-largest private equity firm by assets under management, owns a 77.44 percent stake in the cement maker.

In 2017, Ssangyong Cement extended shares of its subsidiary Ssangyong I&C to shareholders including Hahn & Co. in dividends. As a result, Hahn & Co. obtained 49.8 percent of Ssangyong I&C voting rights.

Since the takeover in April 2016, Hahn & Co. went on to divest operations not closely attached to Ssangyong’s cement business, with Ssangyong I&C being among them.

Prior to the deal, Ssangyong Cement sold its subsidiary Ssangyong Material, dedicated to fine ceramics and ferrite magnet manufacturing, to cement maker Union in 2017 to nearly 80 billion won. 

Itcen said the deal will open the doors to its business overseas as an IT solution provider.

“(Itcen) will be able to leverage Ssangyong I&C’s brand power and human resources, and this would accelerate Itcen’s speed of growth in overseas IT service market,” said Itcen Chairman Kang Jin-mo in a statement.

Itcen in 2018 took over Korea Gold Exchange and Comtec Systems.

The share price of Ssangyong I&C, trading on the Korea Exchange’s Kosdaq bourse, fluctuated. It soared 25.4 percent in the morning, but was 4.5 percent lower as of 2:40 p.m.

In 2019, Ssangyong I&C’s net profit shrank by 92.5 percent to 1.3 billion won, while the operating profit sank 84.1 percent to 458.8 million won, due to lower profitability and higher expenses, according to its preliminary data.

By Son Ji-hyoung (consnow@heraldcorp.com)