The sale of CGBio, a regenerative medicine affiliate effectively led by Yoon Jae-seung, former Daewoong Pharmaceutical chairman and second-generation heir of the Daewoong group, has entered the final stage.
Ahead of the sale, CGBio carried out a physical split and converted to a holding company structure. In the industry, this sale is seen not as a simple streamlining to improve management efficiency, but as a move tied to a reshaping of control by the owner family.
According to the industry on the 4th, the Daewoong group has continued talks with multiple potential buyers to sell CGBio after recently completing a governance overhaul. Some expect that a preferred bidder could be selected as early as this month.
The sale process is said to be overseen directly by the former chairman. It is known that, without appointing a separate lead manager, individual negotiations are underway with medium and large domestic and foreign financial investors (FIs).
◇ "Daewoong second generation" Yoon Jae-seung seeks to strengthen control after stepping down from management
The former chairman is the third son of the late honorary chairman Yoon Young-hwan of the Daewoong group, and a second-generation owner who graduated from Seoul National University's department of public law and served as a prosecutor at the Seoul District Prosecutors' Office. He joined Daewoong Pharmaceutical as executive vice president in 1995, became CEO and president in 1997, and, with the honorary chairman's retirement in 2014, took the helm of the Daewoong group as chairman.
However, in 2018, amid allegations of habitual verbal abuse and insults toward employees, Yoon stepped back from front-line management. Even so, Yoon remains the largest shareholder with 11.64% equity in Daewoong and is involved in management as the group's chief vision officer (CVO).
CGBio, which CVO Yoon is pushing to sell, focuses on artificial tissue substitutes based on biomaterials such as bone, skin, and adhesion barriers. Its flagship product "Novosis," developed in 2017 as the first bone graft substitute in Korea loaded with bone morphogenetic protein, promotes bone formation by inducing differentiation of stem cells into osteoblasts when injected into damaged areas during fracture treatment or spinal disc surgery. It has been used in more than 100,000 surgeries to date, mainly at major domestic hospitals.
The market estimates CGBio's enterprise value at about 700 billion won.
CGBio's largest shareholder is Bluenet, a family company of the Daewoong owner family, which holds 55.84% equity. As of 2018, Bluenet's equity was split among CVO Yoon (53.08%) at the center, spouse Hong Ji-suk (10.35%), and eldest son Yoon Seok-min (6.56%).
◇ Governance reshuffle ahead of sale… driving up the price?
The market is paying attention to the fact that the group carried out a governance overhaul just as the sale of CGBio approaches. Last month, through a physical split, CGBio set "A-Hana" as the surviving entity and placed three new entities—CGBio, Editera, and Novamedtech—under it.
While the company described it as a step to improve management efficiency, industry views largely see it as structural housekeeping with a sale in mind. In particular, placing core affiliates under CGBio is viewed as a structure advantageous for valuing the company and boosting its price during the sale process.
CG MedTech, a KOSDAQ-listed company acquired by CGBio in Feb. 2024, was also organized under CGBio in this reshuffle. Accordingly, the equity structure was simplified to A-Hana–CGBio–CG MedTech. CG MedTech produces implant components for spinal surgery and has recently expanded its business scale by additionally acquiring implant component companies GDS and All Abutment.
This is seen as a move with the value chain leading to CG MedTech in mind. CGBio's structure assigns CG MedTech the role of a contract development and manufacturing organization (CDMO) encompassing spinal and dental implants and biologics, focusing on production efficiency and profitability management.
A representative case is the "ECM Skin Booster," a cosmetic-use modification of the joint soft tissue treatment "CGBio HyaloInject." CG MedTech handled production of the product, and after chemical conjugation, the sales organizations were also integrated. Given CG MedTech's previously limited distribution network competitiveness, the sales organization was restructured under CGBio's overall control. As a result, CG MedTech turned a profit last year.
Editera, a new entity specializing in 3D printing created in this overhaul, is also seen as part of a mid- to long-term strategy for CGBio and CG MedTech to incorporate 3D printing technology into future implant businesses.
A CGBio official said, "From the standpoint of management efficiency, we physically split the core business divisions and new business parts to establish a holding company system," adding, "Core affiliates, including CG MedTech, were placed under CGBio in consideration of synergy."
◇ After the sale of CGBio… potential use to strengthen owner control and fund succession
Given CGBio's current governance, cash secured if the sale succeeds would flow into the owner's personal control sphere, not at the group level.
The industry sees a possibility that the funds could be used in future governance restructuring, such as securing additional equity in the Daewoong holding company or adjusting equity structures of affiliates. There is also speculation that, in the long term, they could serve as resources tied to the succession framework.
There is also talk of a possible acquisition of a digital healthcare company under review by Daewoong Pharmaceutical. According to the industry, Yoon CVO's eldest son, Yoon Seok-min, is said to be participating in the process. Yoon serves as Head of Team for the blood sugar management healthcare business "Wellda" at MCircle, where Yoon CVO is the largest shareholder.
Seers Technology is mentioned as a strong acquisition candidate. Seers focuses on the arrhythmia diagnosis service "mobiCARE" for outpatients and the remote monitoring service "thynC" for inpatients.
Daewoong Pharmaceutical handles domestic distribution and marketing of these products, and based on the hospital and medical institution network that Daewoong Pharmaceutical has built, Seers has risen to No. 1 in domestic market share. It is now pushing overseas expansion.