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Final bidding for botox maker Hugel is delayed Several potential buyers including Chinese firms are in the race

Translated by Ryu Ho-joung 공개 2021-07-30 08:09:47

이 기사는 2021년 07월 30일 08:07 더벨 유료페이지에 표출된 기사입니다.

The final round of bidding for a controlling stake in South Korean botox maker Hugel has been delayed, with both potential buyers and its majority owner Bain Capital taking a cautious approach to a deal that could be worth more than 2 trillion won ($1.75 billion).

The bidding was originally scheduled for this week but has been pushed back a few months, according to industry sources on Wednesday. “A couple of month delay is likely but the timeline seems very flexible,” said a source from the investment banking industry.

Bain and BoA-Merrill Lynch, which is managing the sale process, are separately in discussions with several potential buyers seeking to acquire a 42.9% stake in Hugel.

The buyout firm acquired control of Hugel for about 927.5 billion won in 2017. It is reportedly seeking 2 trillion won from a disposal of its stake in the pharmaceutical company.

The sale method was changed from a private sale to a limited auction as the stake sale attracted strong interest from domestic and overseas investors. Bain reportedly intends to skip the preliminary round of bidding and receive binding offers from a select group of potential buyers, a move seemingly aimed at selecting those with a serious intention to buy.

Among potential buyers known to be interested in acquring Hugel are South Korean conglomerates and Chinese companies including Sihuan Pharmaceutical and investment firm CBC Group.

But some of the country’s conglomerates have withdrawn from the race. Shinsegae said in a filing earlier this month that it decided against the acquisition. Samsung and LG also decided to pull out. GS, known for its cautious approach to acquisitions, is reportedly considering buying a minority stake in the company.

Other potential buyers remaining in the race could have asked Bain for more time for due diligence, industry watchers said. “Given the large size of the deal, both potential buyers and the seller will need to be careful not to drop the ball.”

Hugel is the country’s largest player in the market for botulinum toxin products by market share. It has grown rapidly in recent years as it expands into overseas markets. The company sells its products across 27 countries including Japan, Taiwan and Vietnam and also started exports to China last year.

Its first-quarter revenue increased 55% year-on-year to 63.8 billion won, with operating profit growing to 29.5 billion, the highest ever in the company’s history, in the same period. Exports accounted for 46.6% in Hugel’s first-quarter revenue. (Reporting by Ha-na Suh)
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