Canadian PE Acquires $100 Million in U.S. Ascend Assets; SeAH Holdings Investment Subsidiary Included Among Creditors

Acquisition via Cash, Senior and Subordinated Debt
Iron Grey of SeAH Included Among Subordinated Creditors

Canadian private equity fund Kintera Capital and a group of creditors are acquiring the assets of Ascend Elements, a U.S. battery recycling company. Among the creditors is Iron Grey, an investment subsidiary of SeAH Holdings, which is one of the Korean firms that invested in Ascend Elements.

According to the investment banking (IB) industry on May 29, the U.S. District Court for the Southern District of Texas issued a sale order on May 22 (local time) approving the asset purchase agreement (APA) transaction, in which Bluegrass, a special purpose company (SPC) established by Kintera Capital, will acquire the assets of Ascend Elements.

The final sale price amounts to a total of 101.12 million dollars (167.62288 billion won), consisting of 3 million dollars in cash (4.5222 billion won), 20 million dollars in senior debt (30.148 billion won), and about 78.12 million dollars in subordinated debt (117.758088 billion won). Except for the 3 million dollars in cash, the remaining amount for the asset acquisition will be covered through a credit bid by some of the creditors, replacing cash with their debt claims.

Previously, Bluegrass acted as a stalking horse bidder for Ascend Elements, offering a purchase price of 99.2 million dollars (149.53408 billion won) for Kintera's asset acquisition. However, as no other bidders emerged, Kintera's acquisition was finalized. A stalking horse process is a method where a seller in need of a sale due to restructuring or bankruptcy signs a conditional purchase agreement with a prospective direct purchaser and then proceeds with a public competitive auction.

According to the amended asset purchase agreement (APA), the acquired assets include 100% equity in the UK, French, and Polish subsidiaries, as well as contracts and intellectual property (IP) held by the acquired entities. Meanwhile, Ascend Elements’ cash and cash equivalents, liquid assets, and all equity not subject to the acquisition are excluded from the acquired assets.

One notable point is that Iron Grey, the investment subsidiary of SeAH Holdings and one of the Korean investors in Ascend Elements, is among the creditors participating with Bluegrass. Unlike other companies that simply held equity, Iron Grey will be able to recover its investment through subordinated debt converted into assets of Ascend Elements. The subordinated creditors previously invested in Ascend Elements through subordinated secured convertible notes, which are convertible bonds that determine the conversion price after the investment yields results.

However, the extent to which Iron Grey can recover its principal investment will depend on the future growth of the business based on the acquired assets. A representative from Iron Grey stated, "It is true that the company is included among the subordinated creditors. For now, we will focus on increasing the value of the shares we have secured, and once the asset value has grown sufficiently, we will make a flexible decision based on market conditions." The amount of Iron Grey's principal investment has not been disclosed.

This content was produced with the assistance of AI translation services.