SK Holdings Co., the holding entity of SK Group, has made SK Biotek’s overseas subsidiaries – SK Biotek Ireland Ltd. and SK Biotek USA Inc. – its own subsidiaries. SK Biotek, a pharmaceutical contract development and manufacturing organization (CDMO), is also an affiliate of SK Holdings. Experts say that SK Biotek will pursue an initial public offering (IPO) in the future just like SK Biopharmaceuticals Co.
SK Group has recently made SK Biotek Ireland and SK Biotek USA wholly owned subsidiaries through interim and property dividends and paid-in capital decrease worth 63 billion won (US$54.53 million), according to the data from the Financial Supervisory Service (FSS) on June 24.
SK Biotek Ireland was acquired by SK Biotek in 2017 for 170 billion won (US$146.87 million). It produces raw material medicines, while SK Biotek US is a sales and marketing company.
SK Holdings bought a 100 percent stake in SK Biotek from SK Biopharmaceuticals in February 2016 for 123.80 billion won (US$106.95 million). The company transformed its sub-subsidiaries into subsidiaries to help SK Biopharmaceuticals and SK Biotek expand their businesses with the proceeds from the sales of their subsidiaries.
SK Holdings now owns SK Biopharmaceuticals, SK Biotek, SK Biotek Ireland, SK Biotek USA and AMPAC as its pharmaceutical subsidiaries. It acquired AMPAC Inc., a U.S.-based contract manufacturer of active pharmaceutical ingredients, for 820 billion won (US$708.42 million) in July last year.
SK Group has been turning its bio affiliates into subsidiaries of the holding company as part of its strategy to improve operating efficiency. As SK Biotek, SK Biotek Ireland and AMPAC are all medicine production facilities, the group can improve efficiency by managing them together.
Some experts say that the latest decision is to lay the groundwork to list SK Biotek. An official from the investment banking industry said, “Starting with the listing SK Biopharmaceuticals, a bio affiliate of SK Group, on the benchmark KOSPI market, the group’s unlisted blue chip affiliates, such as SK Biotek, SK Siltron Co. and SK E&S Co., are expected to go public this year.”
Previously, Hana Financial Investment Co. evaluated the appropriate stake value of SK Biopharmaceuticals at 5 trillion won (US$4.32 billion) and SK Biotek at 1.5 trillion won (US$1.30 billion).
SK Group announced its portfolio strategy in April and presented a road map to raise the future value of its four biggest new growth engine businesses, including the biotech and pharmaceutical sector, to 10 trillion won (US$8.64 billion) each.