CDH makes partial exit from Hong Kong-listed Luye Pharma

The private equity firm sold 153.4 million shares at HK$4.62-4.75 apiece, according to a source close to the GP. This represented an up to 9.2% discount on Luye's May 11 closing price. The stock then declined 9.25% on May 12, closing at HK$4.61.

The number of shares sold equates to a 4.62% interest in Luye, which is likely the majority of CDH's remaining holding in the company. As of May 13, only one of the private equity investors that privatized the company in 2012 was still listed as a significant shareholder: CITIC Private Equity, with a 5.92% stake.

CITIC PE and CDH were joined by New Horizon Capital and GIC Private - plus Dianbo Liu, Luye's chairman and largest shareholder - in the acquisition of the company, which was then de-listed from the Singapore Exchange. It returned to public ownership in Hong Kong in 2014, raising $761 million and allowing the PE investors to make partial exits.

Following the offering, CDH held a 6.4% interest in Luye, with CITIC PE, New Horizon and GIC owning 6.8%, 5.4% and 5.9%, respectively. According to the company's 2014 annual report, CDH owned 5.6% at the end of the year. CITIC PE had 5.92%, while GIC had 5.9%. New Horizon's interest was not disclosed.

Founded in 1994, Luye develops and sells patented prescription medicines in various fields, including oncology, orthopedics and neurology. It has almost 4,000 employees, including 300 R&D specialists, and claims to have launched around 30 products. The company's distribution network covers more than 8,500 hospitals in 30 provinces and regions in China, while seven products are candidates for overseas markets.

Luye formally entered the healthcare services space in 2013. Earlier this year, it agreed to buy Healthe Care, Australia's third-largest private hospital group, from Archer Capital for $688 million.

The company generated RMB2.56 billion ($393 million) in revenue in 2015, up from RMB2.54 billion the previous year. Net profit increased to RMB745.4 million from RMB605.5 million.

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• Topics
• Greater China
• Open market
• Healthcare
• CDH Investments Management
• Citic Private Equity
• GIC Private
• New Horizon Capital
• Exit