South Korea’s orthopedic products manufacturer U&I Corp. will acquire a full stake in DM Power Co., a local smart grid service provider, for 16 billion won ($14.7 million) to broaden its business area into the renewable energy sector, the company said on Monday.
Founded in 2005, DM Power is engaged in smart grid business and pursuing energy storage system (ESS) and electric vehicle businesses as future growth engines.
As the official partner of the nation’s state-run utility company Korea Electric Power Corp. (KEOCO) for the advanced metering infrastructure (AMI) project, it will replace analog electric meters with digital ones for more than 2,000 households nationwide by 2020. During the January to September period this year, DM Power recorded 2.2 billion won in operating profit on sales of 18.6 billion won, accounting for 86 percent and 96 percent of full-year operating profit and sales in 2016, respectively. The joint project with KEPCO has been a main driver of the company’s strong performance.
The two firms plan to sign a stock purchasing agreement on Dec. 29. An official from U&I said the takeover would help it diversify its business portfolio by providing an opportunity to enter the renewable energy business. The company also expects a stable growth in its earnings because the performance of DM Power, which will be its fully owned subsidiary, will be reflected in its income statement, according to the official.
Shares of U&I closed Tuesday at 14,050 won, up 0.36 percent from the previous session.
By Chung Woo-sung and Choi Mira
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