SK Ecoplant Sharpens Sustainable IT and Memory Focus; Exiting Waste Management Business to KKR

SK Ecoplant of South Korea plans to focus more intensely on ITAD (IT asset disposition) and electronic waste recycling, while selling its more traditional waste management and water treatment business to private equity firm KKR for $1.2 billion, The Korean Economic Daily reported.

Following the exit from waste management, SK Ecoplant plans to "shift its focus to semiconductor infrastructure and IT recycling businesses, centered on SK Tes and Essencore Ltd." the report said.

Here's a closer look at the two business units:

• SK Tes, which SK Ecoplant acquired in 2022, specializes in secure and sustainable technology lifecycle management services. Key SK Tes services include ITAD, spare IT parts, and battery storage solutions for commercial customers. The firm, backed by 2,600 employees, repurposes roughly 5.8 million IT assets annually.
• Essencore, founded in 2014, specializes in DRAM (Dynamic Random Access Memory) and NAND flash memory. The company's mission is to "Change the world and be a leader in semiconductor distribution."

Longer term, SK Ecoplant may also sell off a stake in offshore wind specialist SK Oceanplant, and may also spin off various carbon capture units from SK Airplus, the report said.

Still, the alleged SK Ecoplant asset sale to KKR has yet to be officially announced. We'll be watching and listening for updates.

IT Asset Disposition: Market Growth Forecast and M&A Activity

Meanwhile, demand for ITAD services appears to be growing. Indeed, annual spending on ITAD is expected to reach $34 billion by 2030, up from $16.8 billion in 2022, according to Research and Markets. That's a 9.2% compound annual growth rate (CAGR), the researcher said.

Among the key business drivers for ITAD spending: The growing desire to reduce e-waste -- thereby keeping PCs, laptops, smartphones, printers, networking equipment and consumer electronics out of landfills.

Amid that backdrop, M&A activity in the ITAD market remains strong. Also, key investors in the e-waste market include the Microsoft Climate Innovation Fund -- which backs Circular Services, a startup that's building and expanding recycling infrastructure across the United States.