Han & Company to Publicly Acquire 78% Stake in Lutronic... Up to 957 Billion KRW Investment

Han & Company, a native private equity fund (PEF), has decided to acquire approximately 78% of Rootronic's shares through a public tender offer. Together with Rootronic's existing largest shareholder, they plan to invest up to approximately KRW 957 billion to secure 100% ownership and pursue voluntary delisting.

Han & Company announced on the 9th that it will conduct a public tender offer for 20,930,256 common shares (77.85%) and 144,680 convertible preferred shares (0.54%) of Rootronic. The tender offer price is KRW 36,700 per common share and KRW 52,428 per convertible preferred share. This price is 15.4% higher than the closing price on the 8th, which was KRW 31,800 per common share.

The tender offer price applies a premium of 30.8% and 37.7% to the volume-weighted average price (VWAP) of KRW 28,068 and KRW 26,649 for the one-month and three-month periods prior to the tender offer date, respectively. It is also 15.4% higher than the 52-week high and the closing price on the 8th of KRW 31,800, and about 10% higher than the average target price of KRW 33,700 suggested by major securities firms.

The shares subject to the Rootronic tender offer include 26,461,189 common shares currently issued, 161,680 convertible preferred shares issued by the target company, which convert to 230,971 common shares (applying the conversion ratio of 1 preferred share to 1.4285714 common shares as of May 15, 2023), and up to 192,500 common shares that may be issued through unexercised stock options that will mature before the tender offer period expires (totaling 26,884,660 shares, hereinafter referred to as the ‘total potential issued shares’). From this, the company’s treasury stock of 808,100 shares, the largest shareholder CEO Hwang Haeryeong’s ownership of 5,122,018 common shares and 17,000 convertible preferred shares (equivalent to 24,285 common shares applying the conversion ratio as of May 15, 2023) are excluded, resulting in a total of 20,930,256 shares (excluding one odd share of convertible preferred shares in the calculation process).

Preferred shareholders holding convertible preferred shares may participate in the tender offer procedure while maintaining their convertible preferred share status. The tender offer period is from today until July 14 (settlement date July 18).

Han & Company stated that depending on the results of the tender offer, if the acquired shares reach a sufficient level, delisting may also be considered.

A representative of Han & Company said, “Rootronic has released proven products that have led trends in the skin and plastic surgery treatment fields for over 20 years, and is a rapidly growing company gaining significant attention in the global premium aesthetic medical device industry. Considering demographic and economic growth factors such as population aging and the increasing demand and purchasing power of younger generations, the growth potential remains high,” explaining their investment decision.

Rootronic is a company that develops, manufactures, and sells aesthetic medical devices targeting various fields such as dermatology and plastic surgery. It has overseas subsidiaries in the United States, Germany, Japan, China, and other countries, with overseas sales accounting for 89%. It is a specialized aesthetic medical device company. Its main products include laser and radiofrequency (RF) skin regeneration devices such as ‘Clarity II,’ ‘LaseMD Ultra,’ ‘Hollywood Spectra,’ ‘Rootronic Genius,’ and ‘Derma V Laser.’ It was the first in the domestic aesthetic medical device industry to surpass annual sales of KRW 264 billion, which attracted attention.

Hwang Haeryeong, CEO of Rootronic, said, “This partnership will be an important turning point for Rootronic to leap to the global top. Rootronic was a pioneer in the domestic laser medical device market and will continue to achieve sustainable growth in the premium aesthetic medical device industry, mainly in advanced countries, through technological development.”

This investment is expected to be the first investment case of Han & Company’s 4th private equity fund, which is currently raising capital and has already completed the first closing with a scale of over KRW 2.5 trillion.