[Asia Economy Reporter Yoo Hyun-seok] Mediphron, a bio company specializing in new drug development, announced on the 1st that it has acquired 100% of the shares of 'SJ Kore', a leading company in HMR (Home Meal Replacement), securing management rights to accelerate new drug development and clinical trials.
A company official stated, "Mediphron's essence and core business is bio new drug development," adding, "By acquiring this highly profitable company, we have secured a solid 'cash cow' that can accelerate bio new drug development."
Mediphron emphasizes that this acquisition clearly increases the possibility of a performance turnaround next year. In particular, it is expected to show movements to accelerate Phase 1 clinical trials of non-opioid analgesics and the development of Alzheimer's disease dementia treatments.
SJ Kore is the number one online company in the frozen tteokbokki sector, famous for the brands 'Nostalgic Elementary School Tteokbokki' and 'Gukddeok'. It is also a representative Hallyu food export company. Due to the Hallyu and K-Food craze, product demand has surged in overseas markets, exporting to 22 countries worldwide including the United States, Australia, New Zealand, and Canada. It had already achieved cumulative exports of 11 million USD by 2019.
The background for Mediphron's acquisition of SJ Kore is primarily the high growth potential of the HMR market, product competitiveness, domestic online distribution networks such as Coupang and Market Kurly as major clients, and overseas distribution networks that have generated over 40% of total sales through exports. The company also expects that synergy between bio research personnel and food development distribution platforms will enable convergent development into the bio-food sector.
With the growth of domestic and overseas HMR markets due to COVID-19 and other factors, SJ Kore expects sales of 11 billion KRW and operating profit of 3.5 billion KRW this year. Growth is expected to accelerate sharply from 2021 after the completion of the new factory.
Meanwhile, the amount Mediphron will pay to acquire management rights from SJ Kore's largest shareholder is 22 billion KRW. Simultaneously with the acquisition, Mediphron will issue 8 billion KRW worth of bonds with warrants (BW) to SJ Kore's largest shareholder. The issuance terms are a 3-year maturity and 0% interest rate, which are favorable conditions.
A company official said, "Through this acquisition structure, Mediphron minimized the actual funds used for acquiring SJ Kore to 14 billion KRW and also attracted long-term investment funds for new drug development," emphasizing, "The BW subscribers also have high expectations for the increase in Mediphron's corporate value, which is developing promising pipelines such as Alzheimer's disease dementia treatments, non-opioid analgesics, and early dementia diagnostic kits."
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