Foreign private equity firms are likely to have an edge over local firms in the race to acquire CJ Healthcare, as the deal is valued at over 1 trillion won (US$892 million).
“It’s hard to find a Korean pharma firm that has enough capital to buy CJ Healthcare,” said a source familiar with the matter. “Given the transaction scale, PEFs are likely consider the acquisition.”
Only three Korean drug makers -- Yuhan, Green Cross and Kwangdong Pharmaceutical -- logged annual sales exceeding 1 trillion won in 2016.
Morgan Stanley, the underwriter for the sale, is in the initial phase of bidding process. It sent out the Information Memorandum to major candidates earlier this month.
CJ Healthcare posted an operating income of 67.9 billion won and 520 billion won in sales last year. The company also plans to launch its first novel drug Tegoprazan, a treatment for gastroesophageal reflux disease, in 2018.
Sources say PEFs that have been actively investing in Korea, such as Bain Capital, Affinity and MBK Partners, could participate in the bidding process for CJ Healthcare.
In April, Bain Capital agreed to invest about US$816 million in Hugel to gain control of the botullinum toxin maker. Hong Kong-based Affinity Equity Partners also bought Burger King’s Japan operations from Korea’s Lotte Group in October.
By Park Han-na (firstname.lastname@example.org