PE-backed New Century Healthcare targets $129m HK IPO

According to a filing, the company is offering 120 million shares at HK8.36 apiece and will debut the stock on January 18. Net proceeds are expected to amount to HK789 million and be applied to renovation work, hospital acquisitions and the construction of a number of new medical facilities in China.

CDH first invested RMB150 million New Century in 2012, AVCJ Research's records show. When the company was restructured ahead of the offering, the private equity firm was awarded shares in the new entity and then contributed a further RMB54.6 million to a pre-IPO round of financing, giving it a stake of 16.6%. It will be diluted to 12.4%, assuming the overallotment option is not exercised.

Boyu and a third investor - CDB Kai Yuan Capital Management, an entity controlled by China Development Bank - participated in the same pre-IPO round, committing approximately RMB272 million and RMB174 million, respectively. Boyu's holding will fall from 8.8% to 6.6%, while CDB Kai Yuan's interest will drop from 5.5% to 4.1%.

New Century operates three clinics in Beijing that collectively claim a market share of 30.4% and 36.5% in the local private pediatric healthcare market and the mid to high-end pediatric healthcare market, respectively. Since late last year, the company has diversified into obstetrics and gynecology with the acquisition of the BNC Women's and Children's Hospital.

Revenue for the first nine months of 2016 came to RMB340 million, 95% higher than during the corresponding period in 2015. Profit during this period declined 15% year-on-year to RMB43 million.

Bank of America Merrill Lynch and China International Capital Corporation are joint sponsors for New Century's offering.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• Hong Kong (China)
• IPO
• CDH Investments Management
• Boyu Capital
• China Development Bank