[Edaily Reporter KIM SAE-MI ] Dental medical device company #Graphy Inc. is set to become the largest shareholder of Ray Co., Ltd.(228670) by acquiring a 26.14% stake for approximately 49.2 billion won. This marks the realization of rumors regarding Graphy Inc.’s acquisition of Ray Co., Ltd.—which first surfaced last May—after about three months. This development comes amid pressure from Megagen Implant, which recently increased its stake in Ray Co., Ltd. to 7.69% with the aim of exerting influence over management.
Graphy Inc. Secures 26% Stake in Ray Co., Ltd. for 49.2 Billion Won… Set to Become Largest Shareholder Next MonthGraphy Inc. announced in a regulatory filing on the 10th that it has decided to acquire 4,087,749 shares of Ray Co., Ltd. (representing a 26.14% stake)
for49.2 billion won from Ray Co., Ltd.’s
largest shareholder, CEO Lee Sang-cheol, and Ray Co., Ltd.’s related party, HANILHOLDINGS.
Graphy Inc. will acquire 2,895,937 shares (18.52%) held by Ray Co., Ltd. for 34.82075 billion won and 1,191,812 shares (7.62%) held by CEO Lee Sang-cheol for 14.33035 billion won, respectively. The acquisition price is 12,024 won per share. Doyeon Accounting Firm, an external appraisal agency, evaluated the purchase price for this share acquisition from April 30 to July 7 and issued an “appropriate” opinion.
The transaction will take place in two phases. First, upon the completion of the first phase on the 15th of next month, a total of 2,401,521 shares—comprising 1,209,709 shares held by Ray Co., Ltd. and 1,191,812 shares held by CEO Lee Sang-cheol—will be transferred to Graphy Inc.
Subsequently, after Ray Holdings acquires all of its existing exchangeable bonds (EBs) from the bondholders, it will secure 1,686,228 shares of Ray Co., Ltd. stock—which are tied to the EB exchange—and transfer them to Graphy Inc. on the 16th of next month. Once both stages are complete, Graphy Inc. will hold a total of 4,087,749 shares.
This structure is also related to Ray Co., Ltd.’s existing method of determining its largest shareholder. Of the Ray Co., Ltd. shares held by Ray Holdings, 1,686,228 shares are deposited with the Korea Securities Depository to enable exchangeable bondholders to exercise their exchange rights. Although Ray Co., Ltd. can exercise voting rights for these shares, they are excluded when determining the largest shareholder; as a result, CEO Lee Sang-cheol became Ray Co., Ltd.’s largest shareholder in November 2024.
Under this agreement, Ray Co., Ltd. will resolve this issue by directly acquiring the convertible bonds, repurchasing the related shares, and then transferring them to Graphy Inc.
If the transaction is completed as planned, Graphy Inc. will become the largest shareholder, holding a 26.14% stake in Ray Co., Ltd. Ray Co., Ltd.’s stake will drop from 18.52% to 0%, and CEO Lee Sang-cheol’s stake will decrease from 1,348,212 shares (8.62% stake) to 156,400 shares (1.00%). The scheduled date for the change in the largest shareholder is the 16th of next month.
Secured Funding via CBs and CPSs Last Month… Securing Management Control by Joining the Board of DirectorsThis transaction is not merely an equity investment but an acquisition of management control. Graphy Inc. stated that the purpose of the share acquisition is “business diversification and the creation of business synergies through the securing of management control.”
Ray Co., Ltd. also announced that, following the signing of the share purchase agreement, it plans to appoint directors and auditors designated by Graphy Inc. at an extraordinary general meeting of shareholders to be convened, thereby partially changing the composition of the board of directors. This structure allows Graphy Inc. to secure not only a 26.14% stake but also control of the board.
Notably, from Graphy Inc.’s perspective, this represents a large-scale investment that exceeds the company’s size. The total acquisition price of 49.2 billion won amounts to 123.8% of Graphy Inc.’s total assets of 39.7 billion won (as of the end of last year on a consolidated basis) and 233.5% of its equity of 21.1 billion won.
Graphy Inc., established in 2017, is a manufacturer and distributor of dental medical devices. Its largest shareholder is CEO Shim Un-seop, who holds a 28.12% stake. Last year, Graphy Inc. recorded revenue of 20.5 billion won and a net loss of 11.7 billion won.
In contrast, Ray Co., Ltd. recorded revenue of 111.3 billion won last year. As of the first quarter of this year, its total assets stood at 176.3 billion won, and total equity at 78.5 billion won. This means that Graphy Inc. is acquiring management control of a listed company that is larger than itself in terms of both revenue and asset size.
Graphy Inc. will raise the funds for the acquisition by issuing convertible preferred stock (CPS) and convertible bonds (CB). Previously, on the 13th of last month, Graphy Inc. decided to issue CPS through a third-party allotment and the 6th series of CBs, and completed the subscription on the 21st of the same month. The company signed this share purchase agreement after first securing the necessary funding during the review process for the Ray Co., Ltd. acquisition, which had been ongoing since last May.
MegaGen Remains a Variable, but Graphy Inc. Holds the Upper Hand in Management ControlWith Graphy Inc.’s acquisition of
management controleffectively confirmed, attention is now turning to the future moves of MegaGen Implant, which has recently been aggressively increasing its stake in Ray Co., Ltd.
MegaGen Implant, an unlisted dental implant company, recently expanded its stake in Ray Co., Ltd. to 7.69% in collaboration with its specially related parties. This represents a 2.56 percentage point (p) increase from the 5.13% stake it held last April, and MegaGen Implant maintains that the purpose of its holding is “to influence management control.”
In particular, Megagen has been intensively buying shares of Ray Co., Ltd. on the open market since July. This means it continued to acquire shares even after rumors of Graphy Inc.’s acquisition of Ray Co., Ltd. had already become public knowledge.
If Graphy Inc. secures its planned 26.14% stake, the gap between that and Megagen’s 7.69% stake will reach 18.45 percentage points. Given that Graphy Inc. representatives are also expected to join the board of directors, Graphy Inc. holds a clear advantage in securing management control based solely on the current contract structure.
This agreement brings the rumors regarding Graphy Inc.’s acquisition of Ray Co., Ltd.—which have been circulating since last May—to a close. On May 7, the Korea Exchange requested that Graphy Inc. issue a disclosure regarding the Ray Co., Ltd. acquisition rumors, to which Graphy Inc. responded three times in May, June, and July, stating, “We are reviewing the matter, but nothing has been finalized.”
Graphy Inc. stated that this announcement regarding the decision to acquire shares in another company serves as its response to the inquiry. After approximately three months of negotiations, Graphy Inc. has effectively been confirmed as Ray Co., Ltd.’s new largest shareholder and the holder of management control.
