MITECH, Reason for Delay in Major Shareholder Change Until Q1 Next Year

[Asia Economy Reporter Jang Hyowon] The change of the largest shareholder of MI Tech, a company listed on KOSDAQ, has been postponed to March next year. This is due to delays in the approval of the merger review in some European countries.

According to the Financial Supervisory Service's electronic disclosure on the 18th, MI Tech announced that the closing date of the stock transfer transaction between the existing largest shareholder Synergy Innovation and Boston Scientific Group (BOSTON SCIENTIFIC GROUP PUBLIC LIMITED COMPANY) has been changed from the 15th to March 15, 2023.

Previously, Synergy Innovation resolved to sell all of its shares in MI Tech (about 64%) and signed a stock purchase agreement (SPA) with Boston Scientific. The sale price was 14,500 KRW per share, totaling approximately 291.2 billion KRW.

Boston Scientific is a global medical device company manufacturing and selling various medical devices such as vascular and non-vascular stents, endoscopes, cardiac, and neurological devices. MI Tech is a company that manufactures non-vascular stents and urological lithotripters. By adding MI Tech's stents, which are differentiated in clinical effectiveness, characteristics, design, and size, to the existing endoscopy business, they plan to complement and diversify their portfolio.

However, since there are overlapping business areas between the two companies, the acquisition can only be completed after obtaining merger review approval in Europe. It is currently known that the approval process for the merger review in some European countries is delayed. Boston Scientific's market share in Europe is around 50%, while MI Tech's is about 3%. It is expected that there will be no concerns about competition restrictions due to the M&A between the two companies.

Yoo Hyun-jae, a researcher at DB Financial Investment, said, "Boston Scientific is expected to expand MI Tech's products, which have secured the Asian market using its global sales network, globally," and added, "R&D and commercialization of new products such as diet stents and biodegradable stents will gain momentum."

Researcher Yoo stated, "MI Tech's sales and operating profit this year are expected to increase by 15.3% and 22.6% year-on-year to 57.9 billion KRW and 16.2 billion KRW, respectively," and added, "The average sales growth rate over the past seven years is 25%, and sales growth across all regions including Asia, Europe, and the United States is expected to accelerate due to the effects of the acquisition."

Furthermore, he added, "In 2023, non-core businesses other than stents will be discontinued to reduce costs, and additional investments will be made in stent production facilities, which is also expected to improve profitability."