MBK Partners' founder and chairman Michael ByungJu Kim / Courtesy of MBK Partners

MBK Partners has acquired a major stake in pharmaceutical wholesaler Geo-Young, strengthening the private equity's health care-focused investment portfolio. The deal is also the largest acquisition transaction on the domestic M&A market this year so far.

According to the investment banking industry sources, the Asia-centered private equity signed a stock purchase agreement on Monday, taking over a 71.25 percent stake of Geo-Young's holding company, previously held by Blackstone.

The holding company of Geo-Young owns a 99.17 percent stake in the pharmaceutical wholesaler, and the company's entire corporate value is estimated to be around 2 trillion won ($1.4 billion).

Founded in 2002, Geo-Young is a leading wholesale distributor of pharmaceutical drug products in Korea. The company was the first wholesale pharmaceutical company that built large-scale logistics facilities in the country while acquiring various pharmaceutical distribution companies scattered nationwide to set up a sales and distribution network.

Logo of Geo-Young

Geo-Young serves hundreds of multinational and domestic pharmaceutical and medical device companies, distributing to more than 11,000 pharmacies, hospitals and clinics through its nationwide logistics network.

In 2019, Blackstone acquired the controlling stake of Geo-Young from Anchor Equity Partners at a corporate value of 1.1 trillion won. With the sale deal signed with MBK Partners, Blackstone is estimated to have nearly doubled its original investment into the company.

Chairwoman and CEO Cho Sun-Hae, who still remains a significant shareholder of Geo-Young by holding a 21.99 percent stake, will retain her leadership position at the company under the ownership of MBK Partners.

In 2023, Geo-Young and its affiliated businesses posted a consolidated sales of 4.4 trillion won, which is a 4.9 percent increase from the previous year. Operating profit increased by 14 percent from 76.2 billion won in 2022 to 86.9 billion won. Geo-Young alone posted annual sales of 3.06 trillion won with an operating profit of 67.2 billion won last year, becoming the country's only company in the pharmaceutical and biotech industry to surpass 3 trillion won in annual sales.

With the acquisition, MBK Partners aims to diversify the pharmaceutical company's scope of business, strengthening its own logistics centers nationwide and venturing into new areas of biosimilar distribution and third-party logistics contracting.

MBK Partners has been heavily invested in the country's health care sector, acquiring dental scanner solution provider Medit and later dental implant company Osstem Implant last year.