Key Takeaways
- • Daewoong Group has named U.S. private equity firm TA Associates as the new preferred bidder for control of CGBio, a regenerative medicine affiliate, after talks with IMM Private Equity collapsed.
- • The collapse stemmed from the scope of a non-compete clause IMM requested, not from price, according to industry sources cited by koreabiomed.com.
- • The initial deal covers a 51% controlling stake, with a further 28.1% available under a conditional purchase agreement. The total value is expected to exceed 1 trillion won (about $690 million).
- • TA Associates has begun due diligence, and the parties are reportedly aiming to sign a stock purchase agreement as early as August.
Summary
Daewoong Group has selected TA Associates, the Boston-based private equity firm, as the new preferred bidder to acquire control of CGBio, the bone graft and regenerative medicine company. According to pharmaceutical and investment banking industry sources cited by koreabiomed.com, a shareholder group led by Daewoong Pharmaceutical Chief Vision Officer (CVO) Yoon Jae-seung chose TA as the new preferred bidder and allowed the firm to begin due diligence. The parties are seeking to sign a stock purchase agreement (SPA) as early as August.
The transaction marks a reversal in the sale process. IMM Private Equity, one of South Korea's largest private equity firms, had been selected as preferred bidder in March and spent about three months negotiating with the sellers. IMM had planned to acquire the initial 51% stake for more than 500 billion won, with an additional 28.1% to be purchased at a similar price if CGBio's annual EBITDA reached 100 billion won. Per the same reports, the two sides had no significant disagreement over price. Talks instead broke down over a non-compete provision IMM sought, which would have barred Daewoong Group and its affiliates from engaging in businesses competing with CGBio after the acquisition. IMM's stated aim was to prevent the seller from entering similar business areas and eroding the value of the acquired company.
Under the TA proposal, the total transaction value is expected to exceed 1 trillion won (about $690 million), broadly in line with the valuation discussed with IMM. Reported figures for the deal vary by source and by exchange rate. Earlier coverage cited approximately 1.11 trillion won, or roughly $715 million to $730 million, for the IMM structure. The headline figure of $746 million cited in the story's title does not appear in the supplemental reporting available for this summary.
The transaction marks a reversal in the sale process. IMM Private Equity, one of South Korea's largest private equity firms, had been selected as preferred bidder in March and spent about three months negotiating with the sellers. IMM had planned to acquire the initial 51% stake for more than 500 billion won, with an additional 28.1% to be purchased at a similar price if CGBio's annual EBITDA reached 100 billion won. Per the same reports, the two sides had no significant disagreement over price. Talks instead broke down over a non-compete provision IMM sought, which would have barred Daewoong Group and its affiliates from engaging in businesses competing with CGBio after the acquisition. IMM's stated aim was to prevent the seller from entering similar business areas and eroding the value of the acquired company.
Under the TA proposal, the total transaction value is expected to exceed 1 trillion won (about $690 million), broadly in line with the valuation discussed with IMM. Reported figures for the deal vary by source and by exchange rate. Earlier coverage cited approximately 1.11 trillion won, or roughly $715 million to $730 million, for the IMM structure. The headline figure of $746 million cited in the story's title does not appear in the supplemental reporting available for this summary.
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