IMM PE invites potential buyers for Genuone worth $752 mn

South Korea’s top-tier contract drugmaker Genuone Sciences Inc. with an estimated value of up to 1 trillion won ($752 million) is in smooth sailing to look for a new owner about three years after local private equity firm IMM Private Equity took its full stake for about half price.

According to sources in the investment banking industry on Wednesday, the Genuone sale deal manager Citigroup Global Markets Ltd. has sent out investment teaser letters to potential bidders for the contract drug-developing and making firm.

Genuone’s stake up for grabs is 100% held by IMM PE, which is estimated at between 800 billion won and 1 trillion won.

IMM PE acquired the pharmaceutical business of Kolma Korea Co., a Korean contract cosmetics maker with major global clients such as Estee Lauder, and its subsidiary Kolma Pharma Co. together for 512.5 billion won in 2020.

The PEF integrated the two to set up Genuone immediately after the takeover and invested an additional 20 billion won to ramp up the factory production capacity of the drug contract development and manufacturing organization (CDMO).

Genuone’s sales jumped 16% to 348 billion won in 2020 from 300 billion won in 2020, and its earnings before interest, taxes, depreciation and amortization (EBITDA) swelled to 55 billion won from 40 billion won over the same period.

Its sales and EBITDA are expected to increase to about 400 billion won and 60 billion won respectively this year.

MAJOR CDMO WITH BIG PHARMA CUSTOMERS

Given the fact that Genuone’s customers include most Korean pharmaceutical companies including major players like Hanmi Pharmaceutical Co., Chong Kun Dang Pharmaceutical Corp., Yuhan Corp. and LG Chem Ltd., its stake sale is expected to garner interest from other major or bigger peers.

LG Chem, which is strengthening its bio business, is floated as a strong candidate, while Lotte Group, which has been striving to expand its CDMO business, is touted as another formidable contender.

Its investment invitation has been sent to multiple strategic investors in the same drug-developing and manufacturing field and financial investors at home and abroad, according to sources. 

Genuone offers a one-stop generic CDMO service from early-stage R&D to production.

IMM PE has recently shifted its focus toward bio and pharmaceutical sectors in anticipation of the related market expansion in rapidly aging Korea.

Its investment portfolio includes stakes in iNtRON Biotechnology Inc., Handok Inc., Genexine Inc. and Alvogen Korea Co.

Write to Ji-Eun Ha at hazzys@hankyung.com
Sookyung Seo edited this article.