Korea Kolmar buying CJ HealthCare for $1.2 bln; shares soar

Kolmar Korea

21/02/2018 08:53

* Private equity firms had bid for CJ HealthCare, local 
paper had 
said 
    * Deal price higher than expected - analysts 
    * Seller CJ Cheiljedang to use funds to cut debt, do 
M&A-analysts 
 
    SEOUL, Feb 21 (Reuters) - South Korean cosmetics and 
pharmaceuticals contract manufacturer Korea Kolmar Co 
 161890.KS  beat out private equity firms for a deal to buy 
domestic health foods and drugmaker CJ HealthCare for $1.2 
billion, sending its shares soaring on Wednesday. 
    Korea Kolmar said in a regulatory filing on Tuesday it 
agreed to buy all the shares of CJ HealthCare, which makes South 
Korea's most popular anti-hangover drink 'Condition', from CJ 
Cheiljedang  097950.KS  for 1.31 trillion won ($1.22 billion). 
    Private equity firms including Carlyle  CG.O  and MBK 
Partners had been in the running for CJ HealthCare, Korea 
Economic Daily previously reported.  urn:newsml:reuters.com:*:nL4N1OJ1TN  
    Shares in Korea Kolmar soared as much as 26.8 percent to its 
highest since October 2016 on Wednesday on the news, before 
paring gains to close up 6.6 percent, compared to a 0.6 percent 
rise in the wider market.  .KS11   urn:newsml:reuters.com:*:nL4N1QB0L7  
    "Korea Kolmar's pharma contract manufacturing and R&D, which 
has reported stable results, will be paired with the sales 
capability of CJ HealthCare," said Lina Oh, analyst at eBest 
Investment & Securities.  
    Shares in seller CJ Cheiljedang, South Korea's largest food 
company, closed up 2.9 percent. The deal price was higher than 
the market expected, which will help CJ Cheiljedang cut debt and 
use as a war chest for mergers and acquisitions, analysts said.  
    CJ HealthCare makes over-the-counter drugs and health foods. 
It recorded about 500 billion won in 2017 revenue, Korea Kolmar 
said. 
    Deutsche Bank advised Kolmar on the transaction, while  
Morgan Stanley advised CJ Cheiljedang. 
($1 = 1,073.1700 won) 
 
 (Reporting by Joyce Lee; Editing by Muralikumar Anantharaman) 
 ((jungyoon.lee@thomsonreuters.com; +82 2 3704 5609; Reuters 
Messaging: jungyoon.lee.thomsonreuters.com@reuters.net)) 
 
Keywords: CJ HEALTHCARE M&A/KOREA KOLMAR