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| The headquarters of Medit in Seoul / Courtesy of Medit |
By Anna J. Park
The second round of competition for the acquisition of dental 3D scanner business Medit has begun, as the consortium of GS and Carlyle lost its preferred bidder position.
According to the investment banking (IB) industry, Unison Capital, the largest shareholder of the world's third-largest dental 3D scanner company, and Citigroup Global Markets Korea Securities ― the sales manager of the Medit deal ― have recently entered into separate negotiations with top global private equity companies, including KKR and Blackstone, over the sales deal.
During the main bid conducted in mid-October, the GS-Carlyle consortium secured the preferred bidder position, as it suggested the highest bidding price of 3 trillion won ($2.26 billion), which is about 300 billion higher than the second-highest bidding price suggested by KKR. While both the seller and the preferred bidder attempted to sign their stock purchase agreement as early as the end of last month, they failed at reaching a final agreement earlier this month, resulting in the GS-Carlyle consortium losing their preferred bidding position.
The cause of the breakup of the deal is said to be Medit's less-than-expected October revenue, which is about 40 percent lower than what the company previously targeted. The GS-Carlyle consortium had hoped to reduce the acquisition price, seeing the October earnings, but the two sides couldn't narrow their gap on a desirable price.
Despite the disappointing revenue in October, it is still a 20-percent year-on-year increase, compared to the revenue of last October. In terms of the accumulated monthly revenue this year until October, the 3D dental scanner company posted a 50-percent year-on-year increase compared to the same period last year. It is expected that the company would log a 60-percent jump in this year's revenue from that of last year.
Unison Capital aims to close the sales deal within this year, whether it be a private deal or a rebidding process.
The local private equity firm purchased a 50-percent stake in the dental equipment firm at the price of 320 billion won in late 2019. During the period, Medit's annual revenue rose to 190 billion won at the end of last year, which is 2.5 times higher, since 2019 when Unison Capital purchased the 50-percent stake. Medit's 100-percent stake ― which includes the 50-percent stake by Unison Capital and stakes held by other shareholders ― will be put up in the sales process.
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