US sanctions on Russia may hinder Korean Medit sale

US private equity giants The Carlyle Group and Kohlberg Kravis Roberts & Co. (KKR) may have to give up on their acquisition plans of Medit Corp., the world’s third-largest 3D dental scanner maker, due to its Russian business given Washington's sanctions on the country.

South Korea’s mid-market-focused PE firm Unison Capital Inc., Medit’s top shareholder, plans to hold a final bid later this month to sell the company’s 100% stake for as much as 4 trillion won ($2.8 billion), according to investment banking industry sources on Sunday.

Korea's leading domestic mobile carrier SK Telecom Co., KKR, CVC Capital Partners, as well as a consortium between Carlyle and energy-to-retail local conglomerate GS Group, were known to be interested in the South Korean 3D dental clinic scanning solution provider.

US sanctions on Russia may keep Carlyle and KKR from taking over Medit since authorities in Washington may judge that those PE firms will provide funds to the company’s Russian business through the acquisition, industry sources in Seoul said.

GENERATES 10% OF SALES FROM RUSSIA

Medit generates more than 40% of its sales from overseas markets including Russia, against which the US imposed economic sanctions due to the Russian invasion of Ukraine.

The company’s sales to Russia were understood to account for about 10% of its total revenue.

Washington has been stepping up its sanctions on Moscow this year, banning US companies and citizens from doing business and financial transactions with hundreds of Russia-linked firms and officials.

Medit has been expanding its overseas business since Unison acquired it in 2019. The company has businesses in other countries under US sanctions such as Iran and Syria.

Write to Chae-Yeon Kim at why29@hankyung.com
Jongwoo Cheon edited this article.