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LG CNS, the information technology services affiliate of South Korean billionaire Koo Kwang-mo’s LG Group, slumped almost 10% in its stock market debut in Seoul on Wednesday. The company ended the day with a market cap of 5.4 trillion won (about $3.7 billion).
The company’s initial public offering was priced at 61,900 won a share, at the top end of its marketed range. The listing raised 1.2 trillion won (about $825 million), making it the biggest IPO in South Korea since LG Energy Solution, LG Group’s electric vehicle battery arm, raised 12.8 trillion won in early 2022—the country’s largest ever. LG CNS will use part of the IPO proceeds for potential acquisitions.
Based in Seoul, LG CNS was established in 1987 as a joint venture between LG and Electronic Data Systems, which was then a subsidiary of General Motors. (EDS was acquired by HP in 2008 for $13.9 billion.) The company changed its name to LG CNS in 2002.
LG CNS provides services related to AI, cloud and IT systems integration and management. The company built IT systems for government organizations, such as South Korea’s National Tax Service and the Ministry of Finance of Indonesia, as well as companies like Kakao Bank and Woori Bank.
For the first three quarters of 2024, LG CNS reported revenues of about 4 trillion won ($2.7 billion) and net income of 233 billion won. About half of its revenue came from cloud and data-related services, such as cloud migration and building infrastructure for enterprise data collection. Its biggest customers are two LG Group companies: LG Electronics and LG Chem. Both LG companies each accounted for about 21% of LG CNS’s total revenues for 2023.
The company’s largest shareholder is LG Corp., the holding company for LG Group, with a 45% stake. Koo, the chairman and CEO of LG Corp., holds a 1% stake in his own name.
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