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CBC-Led Consortium Buys South Korean Botox Maker for $1.5 Billion

September 10, 2021 BeautyMatter
September 10, 2021
Hugel

A consortium led by healthcare-dedicated investment firm CBC Group will acquire a 47% stake in South Korea's top botox maker Hugel Inc from Bain Capital for 1.7 trillion won ($1.5 billion).

WHO: Established in 2001, Hugel is the number-one leader in the botulinum toxin and hyaluronic acid fillers space in Korea with more than 50% market share, and also develops, manufactures, and distributes cosmeceutical products. In October 2020, its injectable type A botulinum toxin officially received marketing approval from the National Medical Products Administration of China, making Hugel the fourth type A botulinum toxin product manufacturer approved for launch in China and the first of its kind from South Korea. In conjunction with this approval, Hugel expects to obtain marketing approvals in Europe and the United States in the next 12 months.

WHY: As CBC continues to build its presence in the Asian healthcare sector, this transaction marks its strategic entrance into the medical aesthetics sector, joining an industry-leading portfolio in the pharmaceuticals and biotech, medical technology, and service sectors.

Founded in 2014, CBC has consistently focused on control-oriented acquisitions and platform-building investments in leading Asian businesses.

IN THEIR OWN WORDS: "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," said Michael Keyoung, CBC's Managing Director and Head of North America and Korea.

Camilla Macapili Languille, Head of Life Sciences at Mubadala, said, "We are very excited about embarking on Hugel's growth journey in partnership with CBC, GS and IMM. This opportunity cements Mubadala Life Sciences' entry into Asia alongside our colleagues from the Mubadala's China Investment Program team, who already have an established presence in China and a long-standing relationship with CBC. We will work closely with our consortium partners and leverage our network to support Hugel's vision of becoming a leading global medical aesthetics company."

Huh Tae-soo, Chairman of GS Holdings, said, "We are very pleased to partner with CBC, Mubadala and IMM in taking Hugel to the next level of growth by combining our respective expertise with the company's well-positioned product offering and competitiveness in the global market. Embarking on this partnership underscores our intention to expand our business by diversifying our bio portfolio."

Tim Chang, Chief Executive Officer of IMM Investment, said, "We are delighted to partner with CBC, Mubadala, and GS to invest in Hugel, further strengthening our global footprint. With IMM's past success in the healthcare sector, we are confident that we can help Hugel to grow beyond Korea to become a true global player."

DETAILS:

  • A consortium led by healthcare-dedicated investment firm CBC Group and Abu Dhabi sovereign wealth fund Mubadala Investment Co, South Korea's GS Holdings Corp, and private equity firm IMM Investment Corp will acquire a 47% stake in South Korea's top botox maker Hugel Inc from Bain Capital for 1.7 trillion won ($1.5 billion).
  • The deal includes agreed-for payments for shares and convertible bonds. Of the total shares to be transferred to the GS-led consortium, 5.36 million shares (or a 42.9% stake) are common shares, while the other 801,281 are convertible preference shares.
  • Hugel's management decisions after the acquisition will be jointly led by the consortium companies, with GS participating as a board member.
  • The market capitalization of Hugel, listed on South Korea's junior board KOSDAQ, was about 2.6 trillion won ($2.23 billion) at the time of the announcement.
  • Hugel last year reported its highest-ever earnings with an operating profit of 78 billion won ($66.8 million) on revenue of 211 billion won ($180.8 million). The company is sustaining strong performance into 2021, posting an operating profit of 26.5 billion won ($22.6 million), up by 59.1% from the same period last year, on revenue of 64.5 billion won ($55.2 million).
  • Hugel reported an operating profit of 56 billion won in the first half of this year against 29 billion won the previous year. According to company filings, its 2020 revenue rose 3% from the previous year to 211 billion won.
  • Morgan Stanley is acting as CBC's financial advisor in relation to the transaction.
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