CITIC PE exits Jialin Pharma via trade sale to Luye Pharma
CITIC Private Equity will exit a 10.26% stake in Beijing Jialin Pharmaceutical after Luye Pharma Group, a Chinese drug maker, agreed to buy a majority stake in its industry peer.
Luye is also backed by CITIC PE, alongside with CDH Investments, New Horizon Capital and GIC Private.
According to a regulatory filing, Luye will pay RMB3.68 billion ($600 million) for a 57.98% stake in Beijing Jialin. Shareholders Mylin Holding will sell its entire 47.72% interest to Luye for RMB3.09 billion, while CITIC PE will receive RMB589 million for its share. The price accounts about 60% of the net proceeds Luye raised from its HK$5.91 billion ($764 million) Hong Kong IPO earlier this year.
Beijing Jialin sells drugs used to treat heart disease and cancer. One of its best known products, A LE, helps reduce high cholesterol levels. The company reported revenue of RMB1.12 billion in 2013, up 36.3% year-on-year, while net profit rose from RMB195 million to RMB252 million.
Luye was set up in 1994 and is headquartered in Shanghai. It develops patented prescription medicines in various fields, including oncology, orthopedics and neurology. The company listed in Singapore in 2004 and was taken private by Dianbo Liu, Luye's CEO and co-founder, in conjunction with the PE investors in 2012.
The IPO in July faciliated partial exits for these investors. Post-offering, CDH holds 6.4% of Luye, with CITIC PE, New Horizon and GIC owning 6.8%, 5.4% and 5.9%, respectively. Liu is still the controlling shareholder.
Luye's first half net profit came to RMB281 million, up from RMB151 million for the same period of 2012. Sales rose by 29% to RMB350 million.
The acquisition of Beijing Jialin will enable Luye to expand its product portfolio in the cardiovascular space, as well as to increase R&D capability.According to the China Medical and Pharmaceutical Economic Information Network, cardiovascular was the third-largest therapeutic area for pharmaceutical products in China last year, accounting for a 14.4% share.
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