As the GS consortium is certain to acquire Korea's botulinum toxin (BTX) developer, Hugel, industry watchers are paying keen attention to how the acquisition would change the company and the domestic BTX and bio markets.
The four-party private equity fund formed by the GS Group, also participated in by IMM Investment, China's CBC Group, and the United Arab Emirates (UAE) Mubadala Investment Company, is likely to sign a contract to acquire U.S. private equity firm Bain Capital's majority stakes in Hugel next week.
CBC Group is a healthcare investment firm focused on middle and late-stage growth and buyout investment opportunities in China. IMM investment has been funding domestic real estate and infrastructure. The UAE's sovereign wealth fund Mubadala Investment Company manages a diverse portfolio of assets and investments in the United Arab Emirates and abroad.
The acquisition cost agreed between the consortium and Bain Capital is estimated to be about 2 trillion won ($1.7 billion).
Hugel is the leading BTX maker in Korea. After launching its BTX injection Botulax in 2010, the company dominated the domestic market in 2016 and has since maintained its place with about 50 percent market share. Due to the legal battle between Daewoong Pharmaceutical and the then market leader Medytox, Hugel emerged as the top supplier in 2015.
The company has succeeded in advancing into the Chinese market by branding Botulax as Letybo and expanding its sales in the domestic market.
In the first half-year, Hugel recorded sales of 128.4 billion won, an operating profit of 56 billion won, and a net profit of 34.8 billion won. Last year, the company saw a record high performance of 211 billion in sales and 78 billion in operating profit.
Hugel plans to focus on expanding its global market share in the second half of the year.
In China, where the company succeeded in entering as a Korean BTX maker for the first time, it plans to conduct various marketing activities targeting local consumers based on its local subsidiary, Hugel Shanghai Aesthetic, founded in February.
The company also has plans to obtain approval for Botulax and expand its presence to the U.S., Canada, Europe, and Australia. In March, Hugel applied for the U.S. Food and Drug Administration's approval and did so in Canada and Australia in June. It expects to win authorization next year as the process generally takes a year.
If the GS Group successfully acquires Hugel's shares from Bain Capital, it will mark the first time the conglomerate makes a trillion-won acquisition deal since it was separated from the LG Group in 2004.
The GS Group, Korea’s fourth-largest conglomerate, will speed up its entry into the bio-industry, which it has selected as a new growth engine and examined various ways to promote, the industry watchers said.