[Edaily Marketin JI YEONG-EUI Reporter] D&T, a medical display manufacturer acquired for around 170 billion won, has re-entered the mergers and acquisitions (M&A) market with a valuation of up to 500 billion won—just two years after its initial acquisition. Although this represents more than a doubling of the company’s enterprise value in a short period, more than five potential acquirers—including SkyLake Equity Partners and Eum Private Equity (PE)—participated in the preliminary bidding. Analysts attribute the strong investor interest to the combination of stable demand for medical displays and the growth potential of specialty displays for casinos and ships.

The rapid profit growth and abundant cash reserves are driving potential buyers to compete despite the valuation having soared sharply in a short period. The enterprise value of 450 billion to 500 billion won cited in the market is reported to be approximately 10 to 11 times this year’s projected EBITDA. With the stability of medical displays combined with the growth potential of specialty displays for casinos and ships, the company is viewed as an acquisition worth the price, even with the premium.

Valuation More Than Doubles in Two Years… Five Private Equity Firms Flock to Bid

According to investment banking (IB) industry sources on the 25th, more than five potential acquirers, including SkyLake and Eum PE, participated in the preliminary bidding for the sale of D&T, which recently closed. Samjung KPMG is serving as the lead advisor for the sale. D&T’s enterprise value, as discussed in the market, is estimated at 450 billion to 500 billion won.

D&T is a company that Highland EP acquired in July 2024 for 172.7 billion won, purchasing a total of 98.1% of the shares, including those held by Coston Asia and the existing management. At the time, Highland EP secured the Military Mutual Aid Association and the Korea Development Bank as major investors to establish a 90 billion won project fund and utilized acquisition financing of around 50 billion won. The existing management team and Dong-A ST also participated as junior investors.

It is reported that Highland EP invested 172.7 billion won in the acquisition of D&T in 2024. The enterprise value currently being discussed in the market ranges from 450 to 500 billion won. This means the expected valuation has risen significantly in just two years. The reason Highland EP is seeking to exit after only two years—earlier than the typical private equity investment period—appears to be driven by rapid earnings growth. D&T’s revenue increased by 8.8%, from 119.6 billion won in 2024 to 130.1 billion won last year. During the same period, operating profit rose by 30.7%, from 20.5 billion won to 26.8 billion won. The operating profit margin also rose by 3.5 percentage points, from 17.1% to 20.6%.

The Appeal of a ‘Niche Leader’ Distinct from General-Purpose Monitors

Founded in 1999, D&T develops and supplies medical

monitors

used in hospital operating rooms, as well as monitors for Picture Archiving and Communication Systems (PACS). In 2013, the company expanded its medical display business by acquiring Wide, a manufacturer of diagnostic and imaging displays.

D&T’s corporate value and appeal are said to stem from the fact that its competitive strategy differs from that of general-purpose consumer monitors. For medical monitors used in surgery or image interpretation, accuracy in color and contrast, as well as durability and stability, are critical. They must also pass various certifications and quality verification processes by client companies. Compared to general-purpose products, where competition centers on price and volume, the barriers to entry are higher. Furthermore, because certification and client verification procedures are required, switching suppliers is more difficult than with general-purpose products—a factor that works in the company’s favor for maintaining business relationships.

Improved profitability—with an operating profit margin exceeding 20% last year—is also cited as a factor that attracted the interest of potential acquirers. The company is assessed to have secured higher profitability than general manufacturers, as medical displays provide a stable revenue base. Given the scarcity of M&A deals, the fact that a mid-sized company with distinct technological capabilities and double-digit profit growth rates has come up for sale appears to be the reason behind the massive participation of private equity funds (PEFs).

D&T has recently been expanding its business scope to include special-purpose displays—such as those used in casino gaming and ships—by leveraging its high-specification and custom design technologies. Although the market size is smaller than that for general-purpose products, the importance of customer-specific specifications and quality verification allows the company to avoid simple price competition. Another advantage is the diversification of its customer base from the medical sector to various downstream industries.

Combining Medical Stability with Growth Potential

… But

Will the 500 Billion Valuation Materialize?

However, business diversification does not necessarily lead to a steady increase in corporate value. Medical products generate relatively steady demand based on hospitals’ equipment investments, replacement needs, and certification barriers. In contrast, casino products are influenced by new casino investments and gaming machine replacement cycles, while marine products depend on shipbuilders’ order intake and construction schedules.

If the proportion of casino and marine products increases, there is a possibility that growth could slow if market conditions change. Whether new businesses can generate recurring revenue rather than one-time orders, and how extensive the overseas customer base is, are expected to be key factors for potential acquirers to evaluate.

The price burden is expected to vary depending on whether this year’s earnings targets are met. The upper end of the expected price range, 500 billion won, is approximately 18.7 times last year’s operating profit of 26.8 billion won. However, the enterprise value of D&T, which is estimated at 450 to 500 billion won, is about 10 to 11 times expected earnings. Considering that the company holds approximately 50 billion won in cash, some analysts assess that the current valuation is not excessively high based on this year’s projected earnings.

Nevertheless, this year’s projected earnings and the current price appear to reflect, to a significant extent, the stable growth of the medical business and the expansion of earnings from specialty displays for casinos and ships. To justify the price, potential acquirers must view D&T not merely as a manufacturer but as a specialty display platform with high barriers to entry.

Private equity funds (PEFs) typically need to exit at a higher price within four to five years of an acquisition. Some analysts suggest that if the acquisition price is already close to 500 billion won, the company will need to further boost its earnings by expanding into the U.S. and European medical markets, securing global clients for casino and marine applications, and acquiring additional companies in the same industry.