LG CNS, the IT services arm of South Korea’s LG Corp., has initiated the order-taking process for its upcoming initial public offering (IPO) in Seoul. The company aims to raise up to 1.2 trillion won (approximately US$816 million) by issuing 19.4 million shares, with each share priced between 53,700 won (around US$36) and 61,900 won (around US$42).
This IPO, which is expected to be South Korea’s largest in three years is crucial for LG CNS, a key player in providing cloud and warehouse management services. The order-taking period for the offering will run until January 15, with the shares being offered by both LG CNS and Macquarie Korea Asset Management, according to deal terms seen by Bloomberg.
The offering, managed by KB Securities, BofA Securities, and Morgan Stanley, is set to close on January 15, with the final pricing slated for January 17 and the listing expected on February 4.
This IPO is potentially becoming the country’s largest since LG Energy Solution’s US$10 billion share sale in 2022 for South Korea’s IPO market. LG CNS’s offering could help boost investor confidence in the market, following the political uncertainties in December that negatively impacted the stock market.
Proceeds from the IPO will be directed toward expanding LG CNS’s business capabilities, including upgrades to its facilities, modernizing its data centers, acquiring other technology firms, and reducing existing debt.
The outcome of the IPO may also have wider implications for the South Korean IPO market. It is expected to influence the planned IPO of K Bank, which withdrew its own offering last year due to concerns over high valuations but is now aiming to revive the process in 2025. Additionally, the IPO could be a litmus test for investor appetite for South Korean stocks following a turbulent year for the country’s stock market, which saw the Kospi index fall 10% in 2024.
LG CNS intends to utilize the proceeds from its IPO for several strategic purposes, including upgrading its facilities, replacing equipment in its data centers, and investing in mergers and acquisitions of other technology-focused companies. The funds will also be directed towards repaying outstanding bonds, strengthening the company’s financial position as it seeks to expand its market footprint.
The company is set to finalize the share price on January 17, with the offering books closing on January 15. Following the pricing, LG CNS aims for a listing date of February 4. Morgan Stanley, BofA Securities, and KB Securities are acting as the joint global coordinators for the IPO.
