Interest in Korean Biopharmaceuticals: World’s Largest PEF Bain Capital Seeks to Acquire CJ Healthcare | BusinessKorea

Thursday, January 18, 2018

Bain Capital has made plans to aggressively buy CJ Healthcare and is doing research in advance. (photo: BusinessKorea DB)
Bain Capital has made plans to aggressively buy CJ Healthcare and is doing research in advance. (photo: BusinessKorea DB)
Seoul, Korea
23 November 2017 - 12:30pm
Choi Mun-hee

Bain Capital, the world’s largest private equity fund (PEF) firm, will join the 1 trillion won (US$920.13 million) race to acquire CJ Healthcare. The company, which is building its healthcare portfolio, has set up a strategy to maximize a synergy between its acquired firms after buying bio pharmaceutical firm CJ Healthcare.

According to investment banking (IB) industry sources on November 21, Bain Capital has made plans to aggressively buy CJ Healthcare and is doing research in advance. An official from the IB industry said, “Bain Capital, which purchased numerous healthcare companies, is seeking ways to create a synergy between its acquired companies through the acquisition of CJ Healthcare. In addition to Bain Capital, two to three more foreign PEF firms are reviewing the acquisition properness but Bain Capital will be the most aggressive buyer.”

Bain Capital is a global leading PEF which has US$75 billion (81.55 trillion won) in assets under management alone. The company has been turning into healthcare specialty PEF by acquiring global healthcare firms over recent years. It has a various healthcare company portfolio ranging from global regional medical groups to bio ventures, clinical consulting companies and specialist operation venture companies. When CJ Healthcare is acquired by Bain Capital, it will have an edge to break into the global market in the future as well as its corporate value will also rise through a synergy with the global PEF’s acquired healthcare firms.

Bain Capital bought out Asia Pacific Medical Group (APMG), a South Korean hospital chain, IQUVIA, an American multinational company serving the combined industries of health information technologies and clinical research, Grupo NotreDame Intemedica, a Latin American healthcare service provider, Stada, an European generic drugmaker, and South Korean botoxl firm Hugel. In fact, the synergy is ongoing. Hugel has continously sought to push into the European botulinum toxin market and it can expand its merchandising network in Europe through large German pharmaceutical firm Stada.

CJ Healthcare, the maker of the nation's first and best-selling hangover drink Condition, researches and develops not only commercial health drinks but also novel synthetic drugs such as immune checkpoint inhibitors, rheumatoid arthritis treatments and nonalcoholic steatohepatitis treatments. The company posts 520.8 billion won (US$478.37 million) in sales and 67.8 billion won (US$62.28 million) in operating profit last year. The company’s net profit also reached 46.9 billion won (US$43.07 million) over the same period, with it having a high level of gains and cash holdings.

CJ Healthcare has recently selected Morgan Stanley as the underwriter for the sale and sent a teaser letter to potential buyers. The company is planning to choose a preferred bidder early in December and finalize the deal early next year.

CJ Healthcare pushed ahead with its initial public offering (IPO) plan last year and its value was estimated at around 1 trillion won (US$918.27 million). However, a majority of market experts say that the figure is slightly higher than the corporate value of similar companies. In fact, Dong-A ST, which sells popular energy drink Bacchus and develops innovative novel drugs, had the sales of 560 billion won (US$514 million) last year, which was the similar level with CJ Healthcare, but its market cap came to some 850 billion won (US$780.17 million) as of the 21st, which was lower than the estimated corporate value of CJ Healthcare. 

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