Straumann, the Swiss dental implant giant, is sinking $30 million into a low-priced competitor in South Korea with an option to buy a majority stake down the line.
Reuters reported that the company bought $30 million of bonds that can be converted into shares of MegaGen, a privately owned South Korean maker of dental implants founded in just 2002 that's growing rapidly in the Asia/Pacific market.
Those bonds can be converted into shares in 2016, and Straumann also gets an option to acquire a majority stake at some point, according to the story.
What is driving this investment? According to Reuters, Straumann, which is the largest dental implant maker in the world, has experienced stagnant demand for premium implants in its primary market in Europe. Executives see growth potential in the lower-priced slice of the market.
In 2013, Straumann CEO Marco Gadola said the company had up to $450 million to snatch up low-cost competitors in emerging markets. What's more, MegaGen isn't its first dip into the pool. Straumann already owns 49% of Brazil's Neodent, according to the story.
MegaGen, meanwhile, said it will spend money from the bond investment on domestic and international expansion, plus the promotion of its digital dentistry tech, Reuters said.
- here's the full Reuters story