South Korea’s leading chemical company LG Chem Ltd. has agreed to sell its dermal filler business to the country’s major buyout fund VIG Partners for 200 billion won ($144 million) as it sharpens its focus on vaccine and new drug development.
LG Chem’s board of directors on Thursday signed off on the sale of the so-called Aesthetic Business under its Life Science unit. The business mainly produces hyaluronic acid filler under the Yvoire and Y Solution brands.
In February, LG Chem kicked off its sale after picking HSBC as the lead sale advisor.
The sale has, however, drawn tepid interest mainly due to a large price gap between the seller and the buyer. LG Chem had sought about 500 billion won, which was considered too expensive given the unit’s earnings potential.
The medical skin-care business generates roughly 100 billion won in annual sales and 30 billion won in earnings before interest, taxes, depreciation, and amortization (EBITDA).
The divestment also excludes the division’s manufacturing facilities, making it less appealing.
Following the deal, LG Chem is expected to accelerate its push to rebalance its Life Science portfolio toward vaccines and novel medicines.
LIFE SCIENCE PORTFOLIO REBALANCING
In June, the company closed the sale of its water filter business to Seoul-based Glenwood Private Equity for 1.4 trillion won.
In 2023, it also sold its vitro diagnostics business to the same PE firm.
In the same year, the company purchased the US biotech firm AVEO Pharmaceuticals Inc. for 800 billion won to strengthen its anti-cancer drug portfolio and accelerate its foray into the US market.
Following the acquisition of AVEO, it unveiled its ambition to join the ranks of the world’s top 30 pharmaceutical companies.
The Life Science portfolio reform is part of Korea’s top chemicals maker’s broader restructuring plan to foster the growth of the pharmaceutical business as one of its three growth pillars, alongside battery materials and advanced materials.
ENHANCEMENT OF A COSMETICS PORTFOLIO
VIG Partners, which did not join the initial bidding round, emerged as a surprise buyer.
The firm is seeking to expand its beauty and cosmetics holdings amid the growing K-beauty wave.
In June, it acquired Viol Co., a Korean developer of advanced medical devices for skincare and aesthetic treatments.
By Eun-Kyung Song
norae@hankyung.com
Sookyung Seo edited this article.
