April 19, 2024

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[THE INVESTOR] US private equity firm Bain Capital will acquire Hugel for about 900 billion won (US$792 million) in its latest push to expand its health care portfolio, the Korean botulinum toxin maker announced on April 17.

Bain will pay 354.7 billion won for 985,217 new shares in Hugel and 100 billion won in convertible bonds, according to regulatory filings. 

Bain also seeks to buy 24.36 percent shares in Hugel, held by Dongyang HC, in a deal worth 472.7 billion won.

If the transactions are completed as planned, the private equity firm with approximately US$75 billion of assets under management will become the largest shareholder of Hugel with 45.3 percent stake.

Founded in 2001, Hegel exports its botulinum toxin product Botulax to 24 countries including Japan, Thailand and Vietnam. It posted sales of 124.2 billion won in 2016 with overseas sales accounting for 54 percent.

Botulax ranked first in the local neurotoxin market in terms of sales, surpassing its domestic neurotoxin competitors like Medytox’s Neuronox.

Korean botulinum toxin makers are strengthening their foothold in the global facial injectable market, mainly Asia and Latin America, with relatively cheaper wrinkle fighters than those developed by bigger global firms such as Allergan, Ipsen and Mertz.

Becoming the largest shareholder of Hugel is a part of Bain’s broader investment plans in the health care businesses.

On April 9, German generic drug maker Stada, Hugel’s European sales partner, agreed to accept a US$5.6 billion takeover offer from Bain and Cinven, a UK private equity fund.

“Bain Capital’s decision to buy Hugel is expected to create synergies for Hugel’s overseas business as the PEF has rich experience in health care investments in the US, China and Europe along with its recent acquisition of Stada,” said Daishin Securities analyst Seo Keun-hee.

Shares of Hugel closed at 396,000 won, up 8.79 percent on April 17.

By Park Han-na (hnpark@heraldcorp.com)