Megagen will invest most of the transaction proceeds in the expansion of its domestic and international implant business and the worldwide promotion of its digital dentistry platform.
The bonds will bear 3% interest per annum and mature in five years.
Straumann has the option to convert the bonds into Megagen shares in 2016, and a call option to purchase further shares from the major shareholders, in order to obtain a majority stake in Megagen.
The bond conversion rate will be based on a low double-digit EBITDA (earnings before interest, taxes, depreciation and amortisation) multiple, reflecting Megagen’s dynamic growth, driven by the successful introduction of innovative, holistic and cost-effective treatment concepts.
Marco Gadola continued: ‘The convertible bond offers us strategic flexibility with controlled risk and a great opportunity to penetrate the value segment in Asia/Pacific.’
Headquartered in Daegu and Seoul, Megagen Implant was started in 2002 by a group of dental surgeons including Dr Kwang-Bum Park, the CEO.
The company offers a broad range of cost-effective implant systems, supplemented by an impressive array of innovative digital dentistry offerings, regenerative tools and products to support implant procedures.
In 2013, Megagen generated global revenues of more than USD 30 million, of which almost two thirds were in Asia/Pacific.
The company’s products are also sold through distributors in Europe and North America as well as in emerging markets such as Russia, China, Taiwan, South East Asia and the Middle East.
Megagen is an important addition to Straumann’s platform of value brands as it fills the need for a strong partner based in Asia.
The strategic investment will support Megagen’s corporate growth targets to become a leading player in the domestic and international value segments.
The two companies will continue to operate separately as different brands with their own philosophy, salesforce, production and value proposition, reflecting the multi-brand strategy that Straumann is already implementing with Neodent, Medentika, Dental Wings and Createch.