Private equity firm Blackstone Inc is nearing a deal to sell its controlling stake in South Korean wholesale drug distributor Geo-Young to North Asian buyout fund MBK Partners for over $1 billion, three sources said.
Blackstone is in final negotiations with Seoul-headquartered MBK about the sale and signing of the deal could happen soon, said one of the sources, who all declined to be named as the information is confidential.
The sources however cautioned that terms are not finalised and could be subject to change.
Representatives from Blackstone, MBK and Geo-Young declined to comment.
The sale would mark Blackstone’s first major exit in South Korea, a market in which it expanded a locally-based team two years ago.
The buyout firm bought Geo-Young in 2019 together with the company’s founders for an undisclosed amount. It now holds a 71% stake in the business, said two of the sources.
Geo-Young was valued at around 1.1 trillion won ($797 million) in that transaction, one of them said.
Geo-Young was founded in 2002 by chairwoman and chief executive Cho Sun-Hae, who has grown the company into the largest wholesale pharmaceutical and medical device distributor in the country, according to Blackstone’s 2019 press release about its investment.
Geo-Young served more than 250 multi-national and domestic pharmaceutical and medical device companies, distributing to more than 11,000 pharmacies, hospitals, and clinics through its nationwide logistics network, the release said.
Founded in 2005, MBK manages over $30 billion in capital across six buyout and two special situations funds, focusing mainly on North Asian markets, according to its 2023 annual letter to investors that was published in late March.
It completed the first closing of its sixth buyout fund at $3.5 billion, the letter said.
South Korea is the firm’s current buyout focus, as it has seen an increasing volume of sales of large, non-chaebol companies due to founder succession issues while assets there remained cheap, MBK’s founder and chairman Michael Kim said in the letter.
Reuters