Victor Chang talks to the South Korea economic newspaper Sedaily on ESG investment
ESG is key in determining any enterprise’s medium-and-long-term growth plans – and potential. This year, more companies will engage more actively in ESG-related M&A than ever before.
ESG investment: global growth engine
Victor Chang, Managing Director of BDA Partners’ Seoul office, told the South Korea economic newspaper Sedaily, “ESG is gaining traction as a key growth driver that can completely transform business models, rather than being a transient trend.”
Early this year, BDA Partners — “the global investment banking advisor for Asia” — orchestrated SK(034730) ecoplant’s acquisition of Singapore-based e-waste company TES, for KRW1.2tn (US$1bn). Representing Kuala Lumpur-headquartered private equity fund Navis Capital as exclusive sell-side advisor in their exit from TES, BDA Partners successfully secured agreement between the two sides. It helped that, back in 2020, BDA Partners had previously advised SK ecoplant itself, on its acquisition of EMC Holdings and was known as a principled and professional intermediary by buyer as well as seller.
Despite expanding its environmental business via a series of acquisitions of domestic waste disposal players, SK ecoplant was facing growth constraints. Through the TES transaction it was able to enter the dynamic global battery waste recycling market. TES is a world leader in electronics recycling with a wide international presence, counting major conglomerates among its customers.
While BDA Partners worked closely with both Navis and SK ecoplant for more than a year to successfully execute the deal, it was its knowledge in ESG that laid the foundations for the negotiations. As one of BDA Partner’s ESG experts, Chang’s direct communication with SK ecoplant was a critical element to bridge gaps between the counterparties.
Recently, South Korean companies have brought more focus on strengthening their competitive edge in the ESG sector, including in waste disposal, renewable energy and new materials. BDA Partners’ Seoul office aims to identify the optimal M&A growth strategy for each client, and is currently providing advisory services to groups such as LG Chem, GS Holdings as well as SK Group which initiated a trillion-scale investment for their new business opportunities.
BDA Partners has deep experience in facilitating Korean clients’ expansion or entrance into the global ESG arena. This February, BDA Partners advised on the acquisition of NEC Solution, a subsidiary of NEC Group, for LG Energy Solution (373220)’s ESS business division. The investment banking advisor has also ramped up its provision of ESG investment advice for overseas companies. In the same month, BDA Partners finalised fundraising worth US$50m for Pollination Group, an advisory and investment firm specialising in global eco-friendly business and “net-zero” transitions. Through collaboration between its Tokyo and London offices, BDA Partners also advised on the divestment of Toshiba subsidiary Transmission & Distribution Europe, a renewable energy plant operator.
Post-pandemic, there is clearly a consensus on the growing importance of ESG investment, however, the entry barriers are often high. Corporations acquiring ESG enterprises via cross-border M&A can face information gaps until they fully acclimatise to the local nuances of conducting business, changing trends, license issues, etc.
Chang further added, “ESG-based M&A is not limited to identifying the right investment targets at an early stage of development; each company should choose an ESG investment theme that suits their strategic strengths while further expertise and networks are required to propel new business.”
BDA Partners plays the role of bridgehead for the ESG investment ambitions of its clients, leveraging both its regional expertise and global networks. It lowers entry barriers for cross-border M&A by identifying local license issues as well as global ESG concerns. Chang mentioned that, as ESG has become an important criterion across all sectors, more and more enterprises are busy looking for related opportunities.
As BDA Partners takes its M&A advisory activities in ESG up a notch to cover IT Asset Disposition, battery recycling and renewable energy generation, Chang highlighted, “ESG investment expertise is a stepping stone for new business; we plan to drive this by accommodating the needs of our clients in such areas as entering the global marketplace and harnessing sustainable development.”
Having joined the company in 2021, Chang has more than 20 years of experience in IB and M&A throughout his career at Lehman Brothers and Nomura.
About BDA Partners
BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.
BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese government-owned bank with US$150bn of assets.
US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc., a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc. is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorised and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd. is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com