LG Chem Ltd.’s attempt to sell its cosmetics filler business has stalled after failing to attract major bidders in a preliminary round, with potential buyers balking at the 500 billion won ($352 million) asking price and the exclusion of manufacturing facilities from the deal.
Investment banking sources revealed Thursday that neither prominent financial investors like Macquarie Asset Management, Affirma Capital and Glenwood Private Equity, nor strategic buyers such as Shinsegae Group, submitted bids for the Aesthetic Business under LG Chem’s Life Science unit.
Industry insiders pointed to the deal’s unusual structure as a key deterrent, as it doesn’t include manufacturing facilities for the medical skin-care products. “Paying the price at 20x EBITDA for the business without manufacturing facilities is risky,” noted an investment banking official.
The dermal filler business, which operates under the Yvoire brand, generates approximately 100 billion won in annual sales and 25 billion won in EBITDA. At the current asking price, potential buyers consider the valuation excessive.
Sources also criticized the seller’s approach, claiming the information memorandum contained insufficient details, with LG Chem stating it would provide comprehensive information only to formal bidders.
With major Korean and global investors stepping back, Chinese investors have emerged as likely buyers, particularly given China’s status as a key market for LG Chem’s dermal fillers. The selection of HSBC as lead sale advisor in February despite its limited M&A presence in Seoul further supports speculation about potential Chinese investment.
The divestiture aligns with LG Chem’s strategic restructuring of its Life Science unit to prioritize vaccines and new drug development.
