Yunfeng joins the battle for US-listed iKang

In a statement, iKang said Yunfeng has offered $20-25 per share for all outstanding American Depository Shares (ADS) in iKang. The new offer, which gives the US-listed Chinese company a valuation between $1.3-1.6 billion, is in the same range as previous bids.

Ligang Zhang, founder and CEO of the company, initially teamed up with FountainVest Partners last August to submit a bid of $17.80 per share. The move came just four months after iKang listed in the US. A PE-backed consortium that included its industry rival Meinian Onehealth then offered $22 per share, prompting iKang's management to announce a right issue, or "poison pill" strategy, intended to thwart the rival bid. The Meinian consortium came back in December with an offer of $23.50 per share.

The Zhang-led group has yet to improve on its $17.80 bid, but it brought in Alibaba Group, Ontario Teachers' Pension Plan (OTPP), China Life, Legend Capital, New China Capital International and LTW Capital Jaguar Investment to join the consortium. In response to this, the Meinian-led consortium increased its offer to $25.00 per share in January.

Set up in 2004, Beijing-based iKang provides medical examination services through 89 self-owned medical centers in 27 cities, as of June 6. Outpatient services and dental treatments are also provided by a minority of these centers. Third-party service providers are used in 150 cities.

IKang raised $153 million in a US IPO in April last year, allowing NewQuest Capital Partners and GIC to make partial exits. Goldman Sachs, another PE backer, didn't sell any shares in the offering, while an investment vehicle controlled by China Investment Corporation (CIC), bought $40 million worth of shares, representing a 4.6% stake.

The company reported revenue of $290.7 million in 2015, up from $202.3 million the previous year. It also generated a net profit of $26.8 million compared to losses of $6.1 million and $75 million in 2014 and 2013.

This is not the first time that Alibaba has teamed up with Yunfeng Capital - a PE firm co-founded by Alibaba's Jack Ma - to participate in take-private transactions in the US. The two parties joined the investor consortium seeking to privatize Chinese mobile dating app Momo in April.

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• Topics
• Greater China
• Buyouts
• Healthcare
• China
• Yunfeng Capital