SHANGHAI, Aug 4 (Reuters) - A Chinese group led by drugmaker Shanghai Pharmaceuticals Holding Co Ltd and private equity firm Primavera Capital has agreed to buy Australian vitamins maker Vitaco Holdings for A$313.7 million ($239 million).
Vitaco said in a statement on Thursday the Chinese group would buy all of the firm at a valuation of A$2.25 per share, a 28 percent premium to their closing price on Wednesday, less than a year after it listed shares in Sydney at A$2.10 apiece.
Vitaco said the deal would help it grow in the world’s second-largest economy, where vitamins and dietary supplements business is expected to surge to around $20 billion by 2018, according to Euromonitor. That growth is luring firms to look for local tie-ups or tap the market for traditional remedies.
Shares in Vitaco, which owns brands such as Nutra-Life, Wagner and Abundant Earth, has seen the stock plunge over 40 percent from a high of A$3.23 last November, in the month after it listed.
Vitaco’s chairman Greg Richards said in a statement the deal was attractive for shareholders given the “ongoing volatile macroeconomic conditions and regulatory uncertainty in China”. While China is a major destination for Australian goods, Beijing’s move last April to raise tariffs and tighten controls on some imports clouded the business outlook for some players.
Shanghai Pharma said in a filing on Thursday it would take a 60 percent stake of Vitaco for around 938 million yuan ($141 million) as part of a take-private deal with Primavera. It said the deal would combine its own networks and sales channels in China with Vitaco’s high-quality healthcare brands.
The Vitaco buyout comes less than a year after Hong Kong-listed Biostime International Holdings bought larger Australian vitamin maker Swisse Wellness for around $1 billion in 2015 to build on strong Chinese demand.
$1 = 6.6320 Chinese yuan renminbi $1 = 1.3142 Australian dollars Reporting by Adam Jourdan; Editing by Kenneth Maxwell
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