Key Takeaways
- • IMM Private Equity sold a 30% stake in AirFirst (formerly Linde Korea) to BlackRock in 2023 for over 1.1 trillion won, recovering nearly the entire principal investment of 1.3 trillion won deployed in 2019 after just four years.
- • AirFirst's corporate valuation increased 3.5x from acquisition to sale, with the company achieving a 39% Internal Rate of Return (IRR) despite challenging market conditions marked by elevated interest rates and capital market cooling.
- • The industrial gas company's financial performance improved substantially under IMM PE management, with sales rising from 179.7 billion won (2019) to 400.6 billion won (2021) and operating income growing from 34.4 billion won to 70.3 billion won over the same period.
- • The successful exit provided IMM PE momentum to advance its Rose Gold Fund 5, a new blind fund initiative, after the firm had faced challenges with underperforming portfolio companies in prior periods.
- • Market estimates valued AirFirst at approximately 4 trillion won at the time of the sale, with strong growth prospects driven by increased semiconductor manufacturing demand and potential EBITDA expansion from 100 billion won to 300 billion won.
Summary
IMM Private Equity, a leading South Korean private equity manager, executed a significant exit in 2023 by selling a 30% stake in AirFirst, the nation's major industrial gas company, to BlackRock, the world's largest asset manager. The transaction generated proceeds exceeding 1.1 trillion won, allowing IMM PE to recover substantially all of its original 1.3 trillion won investment made in 2019 when it acquired a 100% stake in Linde Korea's Korean division following a Fair Trade Commission-mandated divestiture.
The investment demonstrated exceptional value creation over the four-year holding period. AirFirst's enterprise valuation expanded more than 3.5-fold from the acquisition date, and the transaction generated a 39% IRR—a remarkable performance achieved amid a challenging macroeconomic environment characterized by sustained high interest rates and reduced capital market activity. Market valuations at the time of sale pegged AirFirst at approximately 4 trillion won, with the 30% stake valued above 1 trillion won.
IMM PE implemented an aggressive operational improvement strategy immediately following acquisition, focusing on production capacity expansion in anticipation of rising industrial gas demand from semiconductor manufacturers. This strategy yielded measurable results: AirFirst's annual sales more than doubled from 179.7 billion won in 2019 to 400.6 billion won in 2021, while operating income increased from 34.4 billion won to 70.3 billion won over the same period. The company's EBITDA was projected to expand from 100 billion won at acquisition to as high as 300 billion won, driven by anticipated elevated gas orders from semiconductor facility construction, particularly by Samsung Electronics.
The successful partial exit came at a pivotal moment for IMM PE, which had experienced portfolio challenges and sluggish performance at certain legacy investments. The AirFirst transaction validated the firm's investment thesis and operational turnaround capabilities, providing institutional credibility and capital momentum. IMM PE retains remaining stake in AirFirst and can expect additional gains upon future full or partial exits. The transaction also accelerated progress on Rose Gold Fund 5, a new blind fund being capitalized with 2 trillion won, positioning the firm for continued deal activity in the South Korean private equity market.
The investment demonstrated exceptional value creation over the four-year holding period. AirFirst's enterprise valuation expanded more than 3.5-fold from the acquisition date, and the transaction generated a 39% IRR—a remarkable performance achieved amid a challenging macroeconomic environment characterized by sustained high interest rates and reduced capital market activity. Market valuations at the time of sale pegged AirFirst at approximately 4 trillion won, with the 30% stake valued above 1 trillion won.
IMM PE implemented an aggressive operational improvement strategy immediately following acquisition, focusing on production capacity expansion in anticipation of rising industrial gas demand from semiconductor manufacturers. This strategy yielded measurable results: AirFirst's annual sales more than doubled from 179.7 billion won in 2019 to 400.6 billion won in 2021, while operating income increased from 34.4 billion won to 70.3 billion won over the same period. The company's EBITDA was projected to expand from 100 billion won at acquisition to as high as 300 billion won, driven by anticipated elevated gas orders from semiconductor facility construction, particularly by Samsung Electronics.
The successful partial exit came at a pivotal moment for IMM PE, which had experienced portfolio challenges and sluggish performance at certain legacy investments. The AirFirst transaction validated the firm's investment thesis and operational turnaround capabilities, providing institutional credibility and capital momentum. IMM PE retains remaining stake in AirFirst and can expect additional gains upon future full or partial exits. The transaction also accelerated progress on Rose Gold Fund 5, a new blind fund being capitalized with 2 trillion won, positioning the firm for continued deal activity in the South Korean private equity market.
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