After months of speculation it has been announced that Doosan Infracore has sold its machine tool business to MBK Partners, a private equity firm in Korea.
MBK Partners and a private equity arm of Standard Chartered were among three parties that submitted a binding bid for Doosan Infracore Co Ltd’s machine tools business, all bidding around 1 trillion won ($849 million). The third bidder was a state-run corporation from Hebei, China, the Korea Economic Daily reported, citing unnamed investment banking sources.
Doosan Infracore put the business up for sale in November 2015 to cut debt after it reported a third-quarter net loss of more than 200 billion won.
Doosan Machine Tools’ Namsan factory in Changwon, South Korea
Last September Britain’s Tesco Plc, the world’s third-largest retailer agreed to sell its South Korean business to a group led by MBK Partners for $6.1 billion.
“MBK Partners, our new shareholder who owns 100 percent, is one of the biggest private equity firms in Korea, which has invested in diverse market leading companies such as Doosan Techpack, Coway and Home Plus (Tesco), and I believe it will be our great partner for new development,” said Jae Seop Kim, President of Doosan Infracore Machine Tools Business Group.
“This final agreement will remove all anxiety and rumors which are made and expanded maliciously by many competitor companies with fear and jealousy of the Doosan brand. Therefore, please show customers the continuous stability, confidence in strategic development and financial soundness of Doosan Machine Tools with pride.”
The Doosan story is a little sad. Doosan Infracore built a wonderful machine tool company since taking over Daewoo. Perhaps it got a little heavy in oil and gas, but basically the machine tool division is solid. The company made a colossal blunder in buying Bobcat at the absolute worst time, paying for it with borrowed money. Last year Doosan Infracore laid off 1500 people and lost a fortune in the last quarter.
Doosan Machine Tools manufactures a range of CNC turning centres, machining centres, horizontal boring mills, Swiss turn machines and double column machining centres and is represented in South Africa by Puma Machine Tools.
For more information contact Puma Machine Tools on TEL: 011 976 8600 or visit www.pumamachinetools.co.za