Bain Makes $816 Million Botox Bet in Deal for Hugel Control

  • Company has built 30% share of South Korea’s botox market
  • Bain bought Stada, Hugel’s European sales partner, last week

A woman sits in a beauty salon in Seoul.

Photographer: Eric Lafforgue/Art in All of Us/Corbis via Getty Images

Bain Capital agreed to invest about $816 million in Hugel Inc. to gain control of the South Korea-based maker of beauty products, including botox. Hugel shares rose by the most in five months, pacing gains by a rival maker of the anti-wrinkle treatment.

Bain will pay 354.7 billion won ($312 million) for 985,217 new shares in Hugel and 100 billion won in convertible bonds, according to regulatory filings and an emailed statement from Hugel. Hugel shares jumped 8.8 percent, the most since Nov. 8, to 396,000 won at the close in Seoul. Medy-Tox Inc. climbed 6.7 percent.

The deals would give Bain control of a supplier with an estimated 30 percent of the botulinum toxin market in South Korea, a global leader in cosmetic procedures and surgery. The Boston-based private equity investor agreed to buy Stada Arzneimittel AG, Hugel’s European sales partner, last week in a $5.6 billion deal in partnership with London-based rival Cinven Ltd.

The new stock is priced at about 360,000 won a share, 1.1 percent less than the April 14 closing price. Bain, which is also in talks to buy Hugel’s largest shareholder Tongyang HC for 472.8 billion won, will own 45.3 percent of Hugel if the transactions are completed as planned.

Hugel operating profit will probably rise 32 percent to 83.5 billion won this year, based on the average of analyst estimates, as sales surge 30 percent to 161.3 billion won. Profit was 63.3 billion won last year, triple the 2015 total.

South Korea, which has about 51 million people, had 1.2 million cosmetic procedures in 2015, the highest total after Brazil and the United States, International Society of Aesthetic Plastic Surgery figures for 2015 show.

Botulinum toxin, marketed under names including Botox, Dysport and Xeomin, was ranked as the world’s most popular cosmetic procedure in 2015, tallying 4.6 million cases, according to the ISAPS.

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