OrbiMed, Chinese strategic to buy Canadian healthcare player
OrbiMed will consolidate its control of Canada-listed clinical equipment producer Response Biomedical in an C$11.1 million ($8.6 million) take-private deal including participation by Shanghai Runda Medical Technology.
According to a statement, OrbiMed's Asia division and Runda will acquire all of Response's issued and outstanding common shares at C$1.12 apiece, which represents a 51% premium to the stock's last close prior to disclosure of the deal. OrbiMed already holds 50.1% of the company's approximately 10 million shares.
The stock traded as high as C$1.20 following confirmation of the acquisition and was last priced at C$1.10. Concurrent with the signing of the deal, OrbiMed and Runda committed to a $1 million private placement at $0.56 per share. The acquisition - still subject to shareholder and regulatory approvals - is expected to reinforce the company's footprint in Asia, which includes an office in Shanghai. Canadian operations and the existing Canada-led governance structure will be preserved.
"Runda's strong sales and marketing presence throughout China and their financial strength provide an exceptionally attractive opportunity to combine with Response's product portfolio," said Barbara Kinnaird, CEO at Response. "The transaction will provide the China sales expertise and financial resources to best help Response achieve its full potential."
Response develops, manufactures and markets rapid on-site diagnostic tests for use with a proprietary platform in clinical, biodefense and environmental applications. The tests are commercially available for the early detection of heart attacks, congestive heart failure and influenza, among other conditions. The company recorded a 40% increase in revenue during 2015 to C$15.4 million and a net loss for the year of C$150,000. This compared to a loss of C$2.1 million in 2014.
Founded in 1989, US-headquartered OrbiMed operates offices in Mumbai and Shanghai as well as private equity funds in China and India. It claims $15 million in net assets under management.
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