Wall Street’s $1-trillion giant Blackstone has acquired a majority stake in JJ Tools, a Korean producer of industrial cutting tools, as the group continues to be active in dealmaking in the North Asian country this year.
The investment behemoth said it will partner with JJ Tools founder and CEO Jong-Ik Park, who will maintain a holding in the company and continue to support the business as it expands globally, according to a statement on Wednesday.
Established in 1997, the Seoul-based company specialises in high-precision cutting tools designed to shape or modify materials, like metal, plastic, or wood, including carbide end-mills, thread mills, and drills. These tools are used in industries spanning semiconductors, engineering, automobiles, aviation, and medical.
Blackstone is making an addition to its portfolio after making its first buyout exit in South Korea’s largest drug wholesaler Geo-Young in a deal that was said to be worth $2.1 trillion won ($1.6 billion), DealStreetAsia reported in June.
“We’re continuing our mission of bringing the best of our global private equity franchise to South Korea – identifying great companies and partnering with their talented founders to unlock long-term potential,” said Eugene Cook, Head of Korea for Blackstone Private Equity.
Similar to other mega buyout funds investing in Asia, Blackstone has been pursuing investments in top companies in different sectors in a country whose economy is largely dominated by family-run conglomerates, known locally as chaebols.
JJ Tools is an industry-leading business in value-added industrials, one of Blackstone’s private equity investment themes in Asia, said its principal Kyungmin Song in the statement. “The company is a valued partner and supplier to global customers across multiple fast-growing industries,” he said.
The number of established family-owned businesses looking to sell due to generational changes or the needs for growth capital as well as external business partners has drawn significant investment to the country in the past years.
In 2023, South Korea welcomed three megadeals, including EQT’s $2.3-billion purchase of a majority stake in SK Shieldus; UCK Partners and MBK Partners’s $1.9-billion acquisition of Osstem Implant; and the $1.2-billion sale of a stake in SK On Co to a consortium that consists of MBK Partners, Hillhouse, Qatar Investment Authority, and BlackRock.
