MBK, Unison Capital offer to buy 25 percent of Osstem Implant [Photo by Park Hyung-ki]
Osstem Implant Co. shares jumped nearly 15 percent on Monday after Unison Capital Korea and MBK Partners announced a tender offer to buy Korea’s No. 1 dental implant maker, which is under pressure from shareholder activists led by Korea Corporate Governance Improvement.
Dentistry Investment, a special purpose company established by Unison Capital and MBK Partners, will conduct a tender offer for Osstem Implant at 190,000 won ($154) per share until Feb. 24, Osstem Implant said in a regulatory filing.
The offer price represents a 51 percent premium on the last three months volume-weighted average price of 125,948 won. It is 17 percent higher than the closing price on Jan. 20 and 16 percent higher than the 52-week high of 162,800 won.
The number of planned purchases ranges from a minimum of 2,394,782 shares, or 15.4 percent of the total potential shares outstanding, to a maximum of 11,177,003 shares.
On Jan. 21, UCK and MBK Partners also signed a stock purchase and investment agreement with Osstem Implant Chairman Choi Kyu-ok, the largest shareholder of the company, to buy 1,442,421 of 2,943,718 common shares owned by Choi at 190,000 won per share. With the agreement, the private equity firms aim to secure more than 40 percent of Osstem Implant to fend off KCGI.
KCGI purchased a 5.57 percent stake in Osstem Implant at the end of last year and added 1 percent more this year, becoming the third-largest shareholder of the Korean implant giant. KCGI soon announced a shareholder action. In a letter sent to Osstem Implant on Jan. 19, KCGI proposed corporate value enhancement through a governance reform, arguing that Osstem Implant is undervalued due to poor internal control and inefficient management of subsidiaries.
After the planned tender offer, MBK Partners could create synergy between Osstem Implant and Medit, a local 3D oral scanner manufacturer, which is already under the private equity fund.
MBK Partners acquired Medit from Unison Capital Korea for some 2.4 trillion won last year.
Medit commands 24 percent of the dental scanner market at home and abroad and it is growing fast overseas like Osstem Implant. The global dental scanner market is expected to grow more than 28 percent annually from next year to 2027.
Medit has established sales subsidiaries in the U.S., Germany and China, and has 230 distribution outlets in 100 countries.
Osstem Implant, the unrivaled No. 1 dental implant maker in Korea, is growing fast with annual sales of 500 billion won in 2019, 631.6 billion won in 2020 and 824.6 billion won in 2021. It is ranked fourth in the world in terms of sales and first in terms of sales volume.
By Kang Doo-soon, Yang Yeon-ho and Minu Kim
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