Anchor Equity Partners’ focus on medical waste industry The PE firm has acquired four Korean medical waste management companies since 2017
이 기사는 2020년 04월 01일 08:00 더벨 유료페이지에 표출된 기사입니다.Investor interest in medical waste companies is growing amid a prolonged coronavirus outbreak, and so is attention on portfolio companies of Anchor Equity Partners which started investing in South Korea’s medical waste sector earlier than its competitors.
At the center of the PE firm’s medical waste sector portfolio is Eco Green Holdings, which was set up by Anchor Equity Partners and holds 100 percent of waste management company ESG Co., Ltd.
ESG Co., Ltd. has subsidiaries and associates, comprising ESG Group that operates both industrial and medical waste management facilities nationwide. ESG Group’s medical waste companies include ESG Co., Ltd., ESG Gyeongju, ESG Gwangju and ESG Gyeongsan.
Among these four companies, ESG Co., Ltd. – which is based in Jincheon, North Chungcheong Province – was acquired by Anchor Equity Partners in late 2017 for 57 billion won. Back then, ESG Co., Ltd. had two subsidiaries – each located in Gwangju city and Gyeongsan, North Gyeongsang Province – which later changed their names to ESG Gwangju and ESG Gyeongsan, respectively.
ESG Co., Ltd.’s approved capacity of medical waste management is bigger than any of its rivals in Chungcheong area. The company can also process medical waste from the Metropolitan area because of geographical proximity. ESG Gwangju has one of the most modern incineration facilities in the country, while ESG Gyeongsan also remodeled the facility a couple of years ago to improve the efficiency of incinerators.
In early 2017, Anchor Equity Partners also bought a medical waste company based in Gyeongju, North Gyeongsang Province, which changed its name to ESG Gyeongju after the acquisition. ESG Gyeongju has two incinerators with an hourly capacity of five tons. It also owns a subsidiary called ESG Logis which collects and transfer waste.
The country’s medical waste management market has seen a rapid growth in recent years. According to data from the National Assembly Research Service (NARS), medical waste more than doubled to about 219,000 tons in 2017 from about 91,000 tons in 2008. This rapid growth is attributable to an increased number of nursing facilities amid aging populations and outbreaks of contagious diseases.
The medical waste industry has high entry barriers due to strict regulatory compliance. This limits an increase in incineration capacity and thereby benefits the existing companies as medical waste continues to increase. The cost for medical waste management has showed a continued upward trend for the last ten years, from 690,000 won per ton in 2010 to more than one million won in 2019.
ESG Group’s four medical waste management companies reportedly have a combined capacity of 240 tons a day, which presumably account for more than 40 percent of the country’s total incineration capacity.
These four companies owned by Anchor Private Equity posted combined revenue of roughly 38 billion won at the end of 2018. Specifically, ESG Co., Ltd. generated 9.8 billion won in revenue and operating income of 4.4 billion won according to its separate financial statements as of the end of 2018. ESG Gwangju posted 3.7 billion won in revenue and 800 million won in operating income, while ESG Gyeongju posted 20.8 billion won in revenue and 8.1 billion won in operating income.
(By reporter Han Hee-yeon)
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