MBK Partners acquires pharma giant Geo-Young in $1.4B deal

Private Equity firm MBK Partners has struck a deal to acquire a majority stake in Korean pharmaceutical wholesaler Geo-Young to bolster its health care portfolio.

Geo-Young's second hub distribution center in Cheonan city, South Chungcheong province.

MBK Partners, a top private equity firm in Korea, has struck a 1.94 trillion won ($1.4 billion) deal to acquire major shares in Geo-Young, a Korean pharmaceutical wholesaler, in a bid to strengthen its growing health care portfolios.

MBK Partners signed a share purchase agreement with the world's largest alternative asset manager Blackstone to acquire a majority 71.25 percent of shares in the pharmaceutical unit, according to a source with knowledge of the matter. Shares held by Cho Sun-hye, the CEO and a co-founder of Geo-Young, were not included, industry sources said Wednesday.

This deal is reported to be the biggest in the country’s mergers and acquisitions market so far this year, with an estimated value of up to 1.94 trillion won.

MBK Partners will remain a financial investor, rather than a strategic investor, in Geo-Young.

"The firm has a keen interest in the health care sector as its target countries, including Korea, China and Japan, transition into aging societies," said the source who spoke on the condition of anonymity.

"The company will continuously look for the top-ranked health care players with continued growth potential," the source said.

To this day, MBK Partners has invested at least 6.8 trillion won in six health care companies in Korea, China and Japan over the past three years, including domestic companies Medit in December 2022 and Osstem Implant early last year.

Founded in 2002, Geo-Young is the largest wholesale pharmaceutical and medical device distribution network in Korea. It has grown expansively by acquiring drug distributors across the country beginning with its acquisition of Carebest, a subsidiary of SK Networks.

In 2023, Geo-Young posted annual sales of 3.06 trillion won and an operating profit of 67.2 billion won last year, up 5.1 percent and 11.7 percent from a year earlier, respectively, per its financial statement. Its cash and cash equivalents marked 94.8 billion won last year, a decrease from 126.6 billion won in 2022.

Geo-Young is the only company in the pharmaceutical and biotech industry to exceed 3 trillion won in annual sales.

Representatives from MBK and Geo-Young declined to comment.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]