Morgan Stanley PE closes first Korean buyout in 8 yrs

Morgan Stanley Private Equity has acquired a South Korean dietary supplements maker Life & Bio Co., in its first Korean buyout deal in eight years.

The PE firm took over an 80% stake in the functional food startup and a 20% stake in the latter's baby food brand Foodcare late last year for around 80 billion won ($70 million) in aggregate, according to people with knowledge of the matter on April 5.

The deal marked Morgan Stanley PE's first management buyout in the country since it purchased Hyundai L&C Co., a home interior company, in 2014.

Established in 2016, Life & Bio produces a variety of human-tested health supplements including vitamins, fat-burning supplements and over-the-counter sleep aids.

It is now diversifying into general food and beauty products, selling all its products on its online platform called Phytonutri.

Rising health consciousness following the COVID-19 outbreak is drawing interest in healthcare companies. Morgan Stanley PE is expected to make bolt-on acquisitions of other healthcare firms to boost Life & Bio's value. 

Its domestic portfolio includes a Korean restaurant franchise Nolbu, which it had bought for 120 billion won in 2011 and Jeonju Paper Corp., a corrugated cardboard maker. Now it is seeking to exit from Jeonju Paper it had acquired jointly with Shinhan Alternative Investment for 810 billion won in 2008.

Since its former Korean head Lee Sanghoon moved to TPG to lead its South Korean operations, Morgan Stanley PE has been rarely seen in the domestic M&A market. 

By comparison, TPG in 2019 acquired another Korean dietary supplement manufacturer Health Balance for around $250 million.

Write to Chae-Yeon Kim and Jun-Ho Cha at why29@hankyung.com
Yeonhee Kim edited this article