LG Chem shortlists firms for sale of vitro diagnostic business

LG Chem Ltd. logo [Courtesy of LG Chem]

LG Chem Ltd. shortlisted several South Korean private equity fund operators in the sale of its vitro diagnostic medical device business.

According to sources on Tuesday, Glenwood Private Equity, STIC Investments, Korea Investment Private Equity and EUM Private Equity were shortlisted for the sale of its medical device business, which could be worth over 100 billion won ($76.12 million).

The shortlisted firms will conduct due diligence for a month before deciding whether to participate in the final bidding, which is scheduled to take place later this month. LG Chem and lead underwriter Samjong KPMG held preliminary bidding last month, with five potential buyers submitting a letter of intent.

LG Chem has been involved in the Korean diagnostic market since 1992, producing diagnostic reagents. It obtained an import license for vitro diagnostic medical devices in 2006 and a manufacturing approval in 2013. The company generated sales of some 40 billion won from the diagnostic business last year, which accounted for about 4 percent of its life sciences division’s total revenue.

The decision to sell the vitro diagnostic business is seen as part of LG Chem’s plans to focus on drug development, which was further supported by its acquisition of Nasdaq-listed AVEO Pharmaceuticals for $571 million in January, while the company was not able to take advantage of its expertise in allergy diagnostics during the pandemic.