HanWool & Jeju acquires 28.2% stake in Dongyang Precision for 16.5 billion won for business diversification, external valuation confirms fairness
HanWool & Jeju has decided to acquire 1,240,680 common shares of Dongyang Precision for approximately 16.5 billion won. This is part of business diversification and revenue expansion to achieve management goals.
The acquisition funds will be raised through a third-party allotment rights offering and convertible bond issuance, with part paid via in-kind contribution of convertible bonds. The acquisition amount is 211% of the company's equity, significantly increasing financial leverage.
External valuation firm Yeoil Accounting Corporation applied the discounted cash flow method and estimated the per-share value of Dongyang Precision at 11,870 to 16,039 won, deeming the acquisition price within the fair range.
The board passed the resolution with one outside director present and one absent, and disclosed plans for another third-party allotment within six months. Existing shareholders should be cautious of potential additional dilution.
[AI Summary]While HanWool & Jeju's expansion into the defense industry through the acquisition of Dongyang Precision is positive, the deal size at 35.6% of market cap and full financing via equity and CB issuance inevitably dilutes existing shareholders. The transaction price is fair per external valuation, but the announced follow-on offering may weigh on the stock price in the near term.
KOSDAQ Filing Information
Report on Major Matters (Decision to Acquire Stocks and Investment Securities of Other Corporation)