LG Chem has reached an agreement to sell its water filter business to Glenwood Private Equity (PE) for approximately 1 trillion won ($692 million), reports The Korea Economic Daily. This decision is part of the company's ongoing efforts to strengthen its financial position amid increasing market uncertainty.
Sources familiar with the matter revealed last week that LG Chem has selected Glenwood PE, a Seoul-based private equity firm, as the preferred bidder and is in the process of finalising the terms of the transaction.
The sale will be structured as a carve-out, where Glenwood PE will acquire the unit’s assets, workforce, and intellectual property by establishing a new company to manage the business.
This move comes as LG Chem responds to challenges in the petrochemical sector and a more complex global trade environment, including the impact of protectionist policies from the Trump administration. Analysts suggest the sale aligns with LG Chem’s broader strategy to strengthen liquidity and concentrate on core growth areas, including batteries and sustainable materials.
The water filter business, which produces reverse osmosis (RO) membranes used in desalination and industrial water treatment, reported revenues of mid-200 billion won last year. It achieved an operating profit of 90 billion won and an EBITDA of 64 billion won.
Glenwood PE, founded in 2014, is known for its carve-out strategy, where it acquires non-core businesses and works to enhance their value before selling them
The RO membranes, critical in removing salt and other pollutants from water, are essential for wastewater treatment applications. Sources indicated that the deal values the unit at about 20 times EBITDA, highlighting its strong market position and growth prospects.
LG Chem entered the water filter sector in 2014 through its acquisition of US-based NanoH2O. Building on its patents and expertise, the company expanded production at its Cheongju plant in Korea. Over the course of just over a decade, the business grew to hold a 21% share of the global market, ranking second behind Japan’s Toray Industries.
Glenwood PE, founded in 2014, is known for its carve-out strategy, where it acquires non-core businesses and works to enhance their value before selling them. It is reported that Glenwood plans to invest 200 billion won to expand manufacturing capacity following the acquisition, aiming to position the business as a leading global player.
Glenwood PE has previously acquired Techcross Inc., a water treatment unit spun off from LG Electronics, and LG Chem’s diagnostics business. This track record of stable investment and employment post-acquisition played a key role in securing this deal over other global private equity firms.
This latest transaction follows LG Chem's sale of its aesthetics business to Glenwood PE for around 500 billion won. LG Chem is expected to continue its portfolio restructuring, with analysts speculating that its battery separator business may also be sold as the company focuses on high-margin and high-growth sectors.
