[THE INVESTOR] The bidding for Korean security firm ADT Caps, worth up to 3 trillion won (US$2.75 billion), has got a lukewarm response possibly due to the high price sought by current owner The Carlyle Group, according to industry sources on Dec. 13.
Multiple bidders, including CVC Capital Partners, Affinity Equity Partners, Goldman Sachs and Macquarie, have reportedly submitted a preliminary bid by the closing date of Dec. 7.
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However, big name firms such as Bain Capital, KKR, TPG and MBK Partners didn’t participate, belying expectations -- a letdown for one of the biggest pending deals here.
The high price seems to be an issue. Carlyle purchased ADT Caps for 2.6 trillion won from US-based security firm Tyco International back in 2014. The selling price is based on the company’s EBITDA last year of 263 billion won, more than 50 percent jump since the acquisition. But sources say the increased earnings overvalued the company’s fundamental growth potential.
Another issue is the 1 trillion won bidding race for CJ Healthcare, the nation’s 10th largest drug maker owned by CJ Group, this month. Major private equity firms, including Bain, MBK, CVC and Carlyle, have been cited as potential bidders.
“There is a growing appetite for Korean health care and bio firms. Compared to ADT Caps, CJ Healthcare may look like a more lucrative deal,” an investment banking source told The Investor on condition of anonymity.
"Considering the large deal size, PEFs rather than other pharma firms are more likely to consider the acquisition."
By Lee Ji-yoon (firstname.lastname@example.org)