CBC-led consortium buys Bain's stake in Korean botox maker
A consortium led by Asia healthcare-focused private equity firm CBC Group has agreed to acquire a 46.9% interest in Hugel, a South Korean manufacturer of botox and other health-related pharmaceuticals, for KRW1.7 trillion ($1.5 billion).
The seller is Bain Capital, which committed approximately KRW927 billion - in the form of new and existing shares and convertible bonds – in 2017. The consortium will take ownership of 5.36 million shares priced at KRW280,000 apiece, plus convertible bonds worth KRW224.4 billion, according to a filing.
Hugel’s stock closed at KRW211,400 on August 25, down 11.3%, giving the company a market capitalization of KRW2.6 trillion. As recently as last month, it reached an all-time high of KRW279,500.
Other consortium members include Mubadala Investment, Korean chaebol GS Holdings, and local GP IMM Investment.
CBC is committing capital from its fifth fund, which is currently in the market with a target of $1.5 billion. The firm has historically been most active in China, but it has an Asia-wide mandate. The deal also represents an Asia debut for Mubadala’s life sciences strategy.
Hugel was established in 2001, started pre-clinical testing for its botulinum toxin product in 2005, and started exports to Japan four years later. The company went public in 2016.
Last year, its injectable type A botulinum toxin was approved for distribution by China’s National Medical Products Administration of China. Hugel is only the fourth manufacturer of this product type accepted by Chinese regulators and the first from South Korea. Similar approvals are expected in Europe and the US in the next 12 months.
In addition to botulinum toxin, the company is the local market leader for hyaluronic acid fillers, which are used to remove facial wrinkles. Other products include medical equipment – such as suture thread and equipment used to treat endovascular aneurysms – and facial masks and skin recovery treatments.
Revenue came to KRW211 billion in 2020, up from KRW204.6 billion the previous year, while net profit fell from KRW50.3 billion to KRW45.3 billion. In 2016, the year prior to Bain’s investment, revenue and net profit were KRW124.2 billion and KRW50.9 billion, respectively.
“This marks the beginning of CBC's journey into the global medical aesthetics sector, in addition to our current pharma, medtech, and services exposure,” said Michael Keyoung, managing director and head of North America and Korea at CBC, in a statement.
“By leveraging our foothold in international markets, we are confident that Hugel as a Korea-based company will become a leading global aesthetics business by expanding significantly into the United States, Europe, China, and the rest of the world.”
Morgan Stanley served as CBC’s financial advisor on the transaction.
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