Scandal-hit Osstem Implant to be acquired by private equity funds

Scandal-ridden Osstem Implant, Korea’s largest dental implant manufacturer, is being acquired by private equity funds.

A logo of Osstem Implant [NEWS1]

Scandal-ridden Osstem Implant, Korea’s largest dental implant manufacturer, is being acquired by private equity funds.

Unison Capital Korea (UCK) and MBK Partners announced a tender offer to buy Osstem Implant at 190,000 won ($154) per share on Wednesday.

According to UCK and MBK Partners, the companies established special purpose company Dentistry Investment for the takeover. They plan to acquire a stake ranging from 15.4 percent to 71.8 percent. The tender offer is open until Feb. 24.

UCK signed an agreement to buy 1,442,421 shares, or 9.3 percent of the total owned by Choi Gyu-ok, the chairman and the largest shareholder of Osstem Implant, on Jan. 21 at 190,000 won per share — the same as the tender offer — if the tender offer proceeds as planned.

Through the deal and sale of stakes in Osstem’s affiliates, UCK is poised to give Choi 370 billion won.

Taking Choi's account into consideration, UCK is set to become the largest shareholder of Osstem Implant with a 24.7 percent stake, even if it acquires the minimum open purchases of 15.4 percent of the total issued stocks. Choiwill then be the second-largest shareholder with a 9.6 percent stake.

Currently, Choi is the largest shareholder of Osstem Implant holding a 18.9 percent, followed by Lazard Asset Management with a 7.18 percent stake, KB Asset Management with a 5.04 percent stake, National Pension Service with a 5.04 percent stake and Korea Corporate Governance Improvement (KCGI) with a 6.57 percent stake.

Activist fund KCGI recently sent a shareholder letter calling on the dental giant to improve its corporate value through governance reform, including the resignation of Choi.

Following the news of the takeover, Osstem Implant’s share price closed at 186,300 won on Wednesday, a jump of 14.6 percent from the previous trading day. It closed at 186,000 won on Thursday.

An employee of the nation’s largest dental implant maker was found guilty of embezzling a total of 221.5 billion won, the largest-ever for a Korean listed company.

BY AHN HYO-SUNG, SEO JI-EUN [seo.jieun1@joongang.co.kr]