NEW YORK/SHANGHAI Feb 17 Chinese drugmaker
Shanghai Fosun Pharmaceutical Group Co Ltd will
become the largest shareholder in Chindex International Inc
after it and private equity firm TPG said they would
take the firm private in a $369 million deal.
The deal would give Fosun and TPG access to China's
fast-growing private healthcare market, with the government keen
to promote investment in the sector to support overburdened
public hospitals and bring prices down through increased
China's healthcare sector is estimated to hit $1 trillion by
2020, according to McKinsey & Company, but is bogged down by
rampant corruption, skills shortages and fragmentation.
Fosun Pharmaceutical will invest up to $193.7 million in
Chindex International and up to $45 million in its medical
equipment supplier unit Chindex Medical Ltd, the Chinese firm
said in a statement to the Shanghai Stock Exchange on Tuesday.
The deal would see Fosun Pharmaceutical increase its stake
in Chindex from a current 17.45 percent to 48.65 percent. TPG
would hold 48.14 percent, while Chindex founder Roberta Lipson
would retain a 3.21 percent stake.
Lipson, who will stay as CEO, said the new partners and
funding were needed to enable Chindex to build new facilities in
China as well as "significant geographic expansion," according
to a statement emailed to Reuters.
Analysts say China's premium private healthcare sector has
plenty of room for growth, with less than 10 percent of demand
for high-end healthcare services currently met.
Chindex focuses on private healthcare in China through its
high-end United Family Healthcare chain of hospitals, as well as
providing medical capital equipment and products through its
Chindex Medical Ltd unit.
In China it competes with healthcare providers like
Singapore-based Raffles Medical Group Ltd and
Malaysia's IHH Healthcare Bhd.
Fosun, TPG and the other buyers will buy all of Chindex's
outstanding common shares for $19.50 per share in cash, 17
percent above the shares' 30-day weighted average closing price.
Chindex said the deal, which is subject to approval from
Chindex and Fosun shareholders as well as Chinese regulators, is
expected to close in the second half of 2014.
Fosun Pharmaceutical was up 8.42 percent at 1000 (0140 GMT)
on Tuesday morning, against the Shanghai composite down