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Hanall Biopharma [Korea SE: 009420] has shifted its acquisition efforts from targeting biopharmaceutical companies in the US to cheaper EU-based firms, a company source said.

The South Korean pharmaceutical firm had been seeking purchases of companies based in the US and was in active talks with one target it already had business relations with, this news service reported 3 June 2013. It was expected a deal could be finalised as soon as 2014, company sources said at the time.

However, the source told this news service that although Hanall looked at several US companies in the oncology space for acquisition, the stock price of biotechnology companies in the US rose too high for a deal to be completed.

In the past few months oncology businesses in the EU have been a focus as they are more affordable than their US counterparts, the source said. Hanall is still trying to find a good candidate and has so far held discussions with several EU biotechnology companies, the source said. Small businesses are the ideal purchase, likely to be valued between USD 50m and USD 100m, he said.

The firm may also look to acquire a Western company in the autoimmune disease field, the source said. A strategic consultant has already carried out some work to identify potential targets in the space but the companies found were not compatible with Hanall, he noted. Autoimmune acquisitions will likely be considered more seriously in the future after the purchase of a cancer metabolism firm, he added.

A company spokesperson declined to comment on said acquisition plans.

Hanall already has unnamed strategic advisors based in Manhattan, US, which have been helping with the acquisition process in the US for oncology companies, the source said, but noted he was unsure whether the advisors have a strong EU presence. Hanall may soon need to hire advisors to help find EU targets, the source said.

Companies with cancer metabolism programmes are especially interesting, the source noted. Hanall has a cancer metabolism programme, the source said, adding that those with synergy to its current programme will be sought.

The company’s cancer metabolism programme is the mitochondrial primer HL156Can, which inhibits the mitochondrial OXPHOS system, according to the company website. It is currently going through in vivo experiments in xenograph models for liver kinase B1 inactivation in non-small cell lung cancer, BRAF V600E inhibitor-resistant melanoma, and lapatinib-resistant cancer, the company website states.

It is hoped the Korean government funding could be utilised to help complete an acquisition, the source said. The government offers funding packages to domestic pharma firms to encourage them to grow abroad as the local sector is not as strong as other industries in the region, he said. Hanall has already received several million US dollars for its drug development programmes from the government, he added.

In December 2012, the company also raised USD 28m by selling 9.8% of its equity to Yuhan Corporation, according to a company statement.

Inlicensing strategy 

Hanall is also seeking inlicensing opportunities for its domestic market with particular interest in its Korean strongholds in the gastrointestinal and dermatology sectors, said the source.

Cancer programmes are equally interesting inlicensing targets, though the company will look to secure rights for larger Asian territories beyond Korea for this, he added. The company is also keen to sign global deals for oncology if the upfront payment is affordable and risk-sharing partnerships with shared profits could be an option, he added.
The business has no specific timeline for signing inlicensing deals, he said.

Outlicensing programmes is another goal, the source noted, adding a deal for hypertension drug HL040 could be finalised by the end of this year. Three discussions are ongoing and term sheets have been exchanged for a deal in an emerging market, he said.

He did not disclose which market the deal will include, though did say regions the firm has considered include Asia (ex-Japan), South America and Eastern Europe. The drug is in Phase III in South Korea, according to the website.
Previously, sources said it is expected HL040 will be commercialised in 4Q14.
Hanall’s market capitalisation is KRW 242bn (USD 221m).

Mergermarket Mark (Squared)

by Natalie Morrison in London

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Duchembio, a South Korean medical equipment maker, has submitted an application to list on the KONEX, according to a stock exchange announcement on 8 December. Established in 2003, Duchembio recorded sales of KRW 12.8bn (USD 11m) last year. The largest shareholder in the company is its EO Jong-woo Kim, with a 50% stake.

Woori Investment & Securities is acting as the IPO manager.

Source: Stock Exchange Announcement

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PwC South Korea, the financial advisor on the sale of Dongbu LED, officially announced the company sale.

The target is the LED making unit of South Korea’s Dongbu Group.

According to a press release issued on 3 December, the sale will be carried out through a public competitive bidding to raise capital. The advisor is open to receiving letters of intent (Lols) from potential buyers till 15:00 (Seoul time), 30 December 2014.

The Lols need to be submitted to the advisor at the Dongbu LED M&A team, Deal 1 Department, PwC South Korea, 5F, LS Yongsan Tower, 191, Hangangro-2ga, Yongsan-gu, Seoul, Korea.

The documents to be submitted are: letter of intent, confidentiality agreement, and other forms which can be sent by the advisor upon request.

Due diligence is scheduled from 31 December through 14 January. It will be open to receiving binding bids on 15 January from 14:00-15:00.

The contact numbers for making inquiries are 82-10-4129-4216/82-10-2506-1476.

Dongbu LED has entered into court receivership earlier this year. It recorded sales of KRW 48.3bn (USD 45.2m) and a net loss of KRW 5.6bn in 2013.

Source: Company Press Release

UDP, Technology and Victory Production & Company have submitted applications to list on KONEX, according to stock exchange announcements this week. KONEX is a junior market of the domestic bourse for small to mid-sized enterprises.

Established in 2000, UDP, Technology is the leading global OEM and ODM supplier of both hardware and analytics software for the security and IP surveillance industries. Its products are used by some of the world’s leading suppliers in security and business intelligence. UDP’s products also utilize analytics developed by its subsidiary, VCA Technology; and last year, UDP attained a worldwide non-exclusive, royalty-bearing license to ObjectVideo’s patent portfolio.

UDP Technology recorded sales of KRW 27bn (USD 24.2m) in 2013. The largest shareholder in the company is CEO Jung-Geun Ahn, with a 24.2% stake. Hana Daetoo Securities is acting as the IPO manager.

Victory Production & Company is a South Korean film and drama production company valued at USD 27m. Established in 2003, Victory Production & Company recorded sales of KRW 29.5bn (USD 26.5m) and net income of KRW 1.7bn last year. The largest shareholder is a privately held mobile application developer, SL Company, with a 48% stake in the company. Shinhan Investment is acting as the IPO manager.

Nature Republic, a privately held South Korean cosmetics maker, has manadated Daeshin Securities as its lead manager for an upcming 2H15 IPO, reported Maeil Business.
The company’s market cap is estimated to reach KRW 1.2 trn (usd 1.1bn). Overseas investment banks are suggesting the company to float on the Hong Kong Exchange. The company plans to launch its IPO around end of next year. In 2012, the company received a pre-IPO investment from KTB Private Equity and LB Investment, which amounted to KRW 35bn (USD 31m).

Jeju Air, a South Korean regioanal budget airline operator, has mandated Woori Investment and Securities as its IPO manager, reported the Chosun Ilbo.
South Korean Aekyung Group is the parent company of Jeju Air. Jeju Air recorded KRW 432 bn (USD 396.5 m) revenues and an operating profit of KRW 15.2 bn in 2013.

Tomorrow Energy, the South Korea-based waste incineration company, is up for sale, reported the Maeil Business. Interested parties should submit letters of intent to the advisor, PwC South Korea, by 15 December. The sale will be carried out in a new capital raising as well as assumption of corporate bonds. The company entered into debt restructuring process after the former management of the company allegedly embezzled KRW 45bn (USD 40.6m) of company funds.

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EVCA Investors’ Seminar, 4 December at the Westin Chosun Seoul
Closing Networking Reception at the British Embassy that evening

The European Private Equity and Venture Capital Association (EVCA), the association representing the private equity industry in Europe, will be leading a delegation of the most experienced European private equity firms and investors to build relations with limited partners (LPs) in Korea. The EVCA is pleased to invite the Korean institutional investors at the EVCA Investors’ Seminar on 4 December at the Westin Chosun Seoul and at a closing networking reception at the British Embassy that evening. This event is complimentary for the Korean limited partners (LPs). The investors can claim their free pass by simply sending an email at events@evca.eu.

This Seminar will provide an opportunity to meet the most experienced European private equity firms and investors and receive the latest intelligence about European private equity. This year, the Seminar will focus on bridging European and Asia Private Equity. For more information, view the programme here. In the agenda you will find that the event features:

• An extended session on multi-region asset allocation and global diversification strategy led by fellow institutional investors. Learn directly how European private equity fits into a portfolio to generate returns from senior executives of these global investors:
o QIC one of Australia’s largest institutional investment managers with a total AUM of over A$70bn in private equity.
o Illmarinen Mutual Pension Insurance Co one of the most active private equity investors in Finland with a total AUM of over 1.65bn in private equity.
o Adveq international asset manager with a total AUM of over $5.7bn in private equity.

• The latest information on the European regulations from a leading regulatory expert. Whether you are actively investing in Europe or looking to invest, we expect for you to gain a deeper understanding of the regulatory environment so that you are better positioned to navigate existing and upcoming regulations and protect your interests. Special focus will be placed on AIFMD, Basel III and Solvency II.

• Small working groups focused on specific sectors, regions and investment strategies. This is your opportunity to gather details directly from market participants in a smaller, collegiate environment about the European investment landscape including: infrastructure deal flow, accessing the mid-market and navigating the various European regions including DACH, Nordic and UK markets.

To register for your free pass or for any questions, simply email events@evca.eu.

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thebell’s 7th Annual Korea Private Investment Forum will be held on 18 November, 2014 at the Westin Chosun Hotel in Seoul.

thebell Korea Private Markets Investment Forum 2014 celebrates a decade of domestic private equity funds and seeks to increase the breadth of conversation in relation to the private equity markets.

Last year’s forum discussed issues per investor type and provided in-depth discussion on the various issues. This year, the forum will focus on evaluating the current state of the private equity market and also look to the next ten years, contemplating specific and realistic proposals for the market’s future development.

This forum will provide an opportunity to meet Korea’s most active and representative limited partners (LPs), such as National Pension Service, Korea Investment Corporation, as well as a chance to interact with leading LPs showing more interest in this sector, such as the Korea Teachers Pension and Korea Teachers Credit Union.

For more information, view this invitation letter and register online at the bottom of the page here. All Korean and foreign investors welcome!

Last week, Tokyo Gas signed a memorandum of understanding on a strategic collaboration with Korea Gas to further enhance cooperation and communication between the two companies. Tokyo Gas has maintained a close relationship with Korea Gas Corporation through information and technology exchange since the first MOU signed between the two companies in 1990.

The possible areas of collaboration shall include, but is not limited to:

–       Optimization of LNG inventory and/or its owned or chartered shipping capacity;

–       Joint LNG procurement from suppliers in the mid to long term; and

–       Upstream project investment opportunity

In its “Challenge 2020 Vision,” Tokyo Gas declared its targets to reduce raw materials prices and to realize appropriate Asian market prices. With these goals in mind, Tokyo Gas will accelerate collaboration with LNG buyers inside and outside Japan.

The move could help lower Asian natural gas prices, which are higher than in Europe or the U.S., and cut fuel costs. By teaming with Korea Gas, the world’s biggest user of LNG, the Japanese company aims to strengthen its position in price negotiations when purchasing LNG or investing in gas fields, noted a Japanese-language report in the Nikkei Sangyo Shimbun.

Tokyo Gas has a market capitalization of JPY 1.544tn (Usd 14bn).

 

(Sources: Company Press Release(s), Nikkei Sangyo Shimbun)

 

Группа компаний АКОМ

AKOM Group of Companies, a privately held Russia-based manufacturer of car batteries, is seeking to ink a strategic partnership with a Korean company as part of its overseas expansion plan, Financial Director Alexey V. Belokon said.

Speaking on the sidelines of the Russia Samara Investment Relations Conference held in Seoul last week, Belokon noted the tie-up could include a joint venture partnership, co-development, and/or stake acquisitions. AKOM Group is looking to increase its global market share and improve manufacturing technologies through the partnership, he noted.

AKOM Group’s ideal partners include manufacturers of automotive components and electric vehicle systems as well as auto components research & development organizations, Belekon said.

The company welcomes approaches from South Korean companies, including listed South Korean battery makers Sebang (which is known as GLOBAL & YUASA BATTERY), LG, and privately held South korean battery developer Hyundai Enercell, Belokon said.

AKOM recently set up a joint venture company with Accumalux, a Luxembourg-based company specialized in making plastic used in automotive, industrial and motive power batteries, Belokon noted.

AKOM supplies its products to global companies including GM and Ford, he said. Its Russian clients include major automakers such as AvtoVAZ and GAZ Group, among others. Major international auto players such as Daimler Group and its Russian subsidiaries such as Mercedes Benz TrucksVostok and Mercedes Benz Cars & Vans are also cutomers. AKOM has a partnership arrangement with global auto components giant, Johnson Controls, making Varta and Bosch brand batteries on a licensing agreement, according to its website.

AKOM produced almost 1.366m units of batteries in 2011, 1.39m units in 2012, and 1.312m in 2013, according to the Russian Battery Production and Sales Market Report from 2007-2013.

The firm’s products are marketed under four brands – Akom Battery, Forward Battery, Reactor Vattery and Bravo Battery. Its local and international sales are handled by a special business unit, Trade & Marketing Company.

The total number of vehicle batteries on the Russian market in 2013 stood at 5.996m. Key players, apart from AKOM, include Istok/KZA (1.173m units), Tyumen Battery (1.034m units) and Tubor (808,000 units), according to the report.

AKOM adopted a new strategy last year that envisages boosting its annual production to at leat 2.5m by 2015, a feat that will enable it to generate gross annual sales revenue of not less than RUB 5bn (USD 156.25m). This will boost the company’s profitability by 10%, its share of the Russian battery production market to 40% and share of the gross national sales to 10.7%, according to the strategy outlined in company documents.

In 2012-13, the company invested almost RUB 165m into developing production facilities, in addition to the RUB 260m invested into equipment modernization in 2011-12, according to the firm’s data.

The company’s facilities comprise of three production plants, administration and utilities buildings as well as warehouses offering a total of 19,786 square meters.

AKOM Group of Companies was founded in 2001. Ownership of the group is not publicly disclosed, but according to local press reports AKOm was held by a group of Russian investors that included Yuri Kolupaey as principal shareholder, AKOM Group President Nikolai Ignatyev, and Igor Bogdanov, at least as of 2012.

 

by Soo Young Park in Seoul and Christopher Kenneth in Moscow

Mergermarket Mark - Avatar (Text)

Bukwang Pharmaceutical, a South Korean pharmaceutical compay, has signed on a term sheet to acquire Contera Pharma, a Copenhagen, Denmark-based bio startup.

The Korean language report cited Bukwang as it announced yesterday that the term sheet is a commitment letter that contains key agreements on the transaction. According to the report, Bukwang plans to acquire 100% of the Contera Pharma. It aims to finalize the negotiation on details of the potential transaction by early November.

Contera Pharma is developing medicine for symptoms in relation to the central nervous system. A spokesperson from Bukwang said that it will launch a clinical testing of the drugs being developed by Contera next year, targeting global markets.

Bukwang Pharmaceutical has a market cap of KRW 620bn (USD 593.6m).

(Source: Korea Economic Daily)

Woongjin Foods, an unlisted South Korean beverage maker, announced today that it has agreed to buy 100% of Daeyoung Food. Daeyoung Food is a privately held South Korean confectionery maker.

The vendor is a group of South Korean private individual investors including the CEO of the target company. The consideration for the stake is KRW 30bn (USD 28.7m). It will begin one-month due diligience on 25 September. It aims to close the deal during November.

Source: Stock Exchange Announcement (Translated)

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Shin Woo, a listed South Korean leather processing company, has signed on a  stock purchase and sale contract with a consortium led by Sun Focus, an unlisted local solar energy company.

In a stock exchange announcement made on Wednesday 17 Sept., Shin Woo said that the consortium has agreed to acquire the company for KRW 27bn (USD 26m).

Sun Focus is a subsidiary of listed KyeongWon Industry (formerly known as Ubiquam), a Korean handset maker. The sale is a part of Shin Woo’s debt restructuring process sanctioned by a court.

Shin Woo Co., Ltd. manufactures and exports leather in South Korea and internationally. It offers car seat leather, shoes leather, handbags leather, and upholstery leather. The company was formerly known as Shinwoo Corporation. Shin Woo Co., Ltd. was founded in 1972 and is headquartered in Ansan-si, South Korea.

(Source: Stock Exchange Announcement)