Bayer buys Legend Capital-backed Dihon Pharma

Financial details of the transaction were not disclosed. It is also unknown how much Legend invested in the company and the size of its equity interest. The capital came from LC Fund IV, a 2008 vintage vehicle with a corpus of $350 million.

Dihon claims to be a leading player in China's over-the-counter (OTC) market, specializing in TCM treatments for dermatitis, acne, bone condition hyperosteogeny, recurrent oral ulcers, and womb condition endometriosis. The company is best known for dandruff and scalp disorders treatment Kang Wang, antifungal cream Pi Kang Wang, and women's health medication Dan E Fu Kang.

The acquisition is part of Bayer's ambition to become the leading multinational in the Chinese OTC market, of which TCM accounts for about half. Several other multinationals have also expressed an interest in herbal treatments, with Sanofi buying BMP Sunstone for $520.6 million in 2010.

"Adding the strong OTC brands from Dihon to our portfolio will significantly advance our business in China and positions us well for future growth," said Dr. Olivier Brandicourt, CEO of Bayer HealthCare, in a statement. "We think we can leverage our recent acquisition of Steigerwald in combination with Dihon's herbal TCM expertise and pipeline to benefit both these areas, which have a different but related heritage."

Dihon is based in Yunnan province and employs approximately 2,400 people, with several manufacturing sites throughout China. Its products are also sold in Nigeria, Vietnam, Myanmar and Cambodia. The company generated sales of EUR123 million ($168.5 million) in 2013.

The transaction, which is subject to certain conditions, is expected to be completed in the second half of 2014.

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• Topics
• Greater China
• Healthcare
• Exits
• Venture
• Legend Capital
• China
• healthcare
• Exit
• Trade sale