PE-backed Luye Pharma to take full ownership of Beijing Jialin
Luye Pharma Group, a PE-backed Chinese drug maker, has taken full ownership of its industry peer Beijing Jialin Pharmaceutical, acquiring a 42.02% interest from existing PE shareholders.
According to a regulatory filing, Luye is paying RMB2.42 billion ($395 million) to acquire the remaining stakes from 13 financial institutions and individual investors. Xinjiang Plane Trees Equity Investment exited a 14.02% stake, while Beijing Zhongguangcun Guosheng Venture Capital Center sold 8.8% an interest.
Other sellers included Shenzhen Cornerstone, Tibet Silicon Valley Angel Venture Capital, Ningbo Chengrun Investment, Suzhou Blue County Venture Capital, Dazi County Zhongrong Tarzan Preferred Fund and Qingdao Ocean Foundation VC. Each company held 1-2% of the company.
Luye, backed by CITIC Private Equity, CDH Investments, New Horizon Capital and GIC Private, announced in August that the company paid RMB3.68 billion for a 57.98% stake in Beijing Jialin. CITIC sold a 10.26% stake in Beijing Jialin, receiving RMB589 million from Luye.
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 drug maker raised HK$5.91 billion ($764 million) in a Hong Kong IPO earlier this year. The public offering facilitated partial exits for these investors. Post-offering, CDH held 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.
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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