HONG KONG, April 12 KKR & Co LP has
agreed to invest $65 million in China Cord Blood Corp,
the two companies said in a joint statement on Thursday, the
global private equity firm's first healthcare investment in
KKR's investment through a convertible bond into China's
largest cord blood storage company will give the private equity
firm about 24 percent of China Cord Blood on a fully diluted
basis, according to an industry source.
Cord blood is found in the umbilical cords of newborn babies
and is increasingly stored and used to treat diseases such as
leukaemia and lymphoma.
China Cord Blood, listed on the New York Stock Exchange
since 2009 with a market cap of about $200 million, would use
the money to expand operations in China, said the sources.
China's penetration rate for cord blood storage is just 1
percent, but with a growing middle class and continuing
government restrictions on how many children people can have,
that rate is expected to rise as Chinese parents invest more in
their children's wellbeing.
China Cord Blood has operations in Beijing, Guangdong
Province and Zhejiang Province, an area with more than 180
million people and about 1.9 million births annually, the
KKR invested in China Cord Blood through its $1 billion KKR
China Growth Fund. Other investments from the fund include a $60
million in investment in the initial public offering of China
Outfitters Holdings Ltd as a cornerstone investor.
The sources could not be identified as they were not
authorised to talk to the media.
Citigroup Inc was financial adviser to KKR.