GPs back $605m take-private of China's SciClone pharmaceuticals

The consortium has agreed to pay $11.18 per share for all outstanding shares in SciClone, which represents an 11% premium to the June 7 closing price. The company’s stock rose jumped nearly 8% in response to the announcement, closing at $10.90 on June 8.

SciClone produces a range of drugs used to treat oncology, infectious diseases, and cardiovascular disorders. It is best known for Zadaxin, which was launched in China 21 years ago and is now approved in 30 countries. It stimulates the immune system to fight diseases, such as hepatitis, as well as various forms of cancer. The company has also developed DC Bead, which is used to block blood flow to tumors.

China – and Zadaxin in particular – accounts for more than 90% of SciClone’s sales and the company has 460 sales representatives nationwide who manage relationships with approximately 2,000 hospitals. Four-fifths of its business comes from 300 hospitals in major cities. Revenue came to $160.1 million in 2016 while net income came to $30.7 million. Both were marginal improvements on the previous year.

Jon Saxe, chairman of the SciClone board, which is supporting the deal, said in a statement that the challenges of remaining a publicly traded company in the competitive and price-sensitive China pharmaceuticals market represent a long-term risk to SciClone’s ability to maintain a strong growth trajectory and to meet its financial objectives.

Jeffrey Li, founder and CEO of GL Capital, added: "With the extensive local knowledge and vast resources brought by the various members of the buyer consortium, we are confident the company will have a bright and promising future for all of its customers, patients, employees, and other stakeholders."

GL Capital is a healthcare-focused private equity firm that has previously invested in the likes of Luoxin Pharmacy Group – which is currently subject to a take-private bid that also involves Ally Bridge Group – Arrail Dental Clinic, China Traditional Chinese Medicine, and Wenzhou Kangning Hospital. Li is the son of Li Ruihan, formerly head of the Chinese People's Political Consultative Conference (CPPCC).

CDH has more than $17 billion in assets under management across multiple strategies and is currently investing its fifth US dollar-denominated fund, which closed at $2.55 billion in 2014. Ascendent is in the process of deploying its second fund. That vehicle closed at the hard cap of $600 million in 2015.

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• Topics
• Greater China
• Buyouts
• Healthcare
• China
• CDH Investments Management
• Ascendent Capital
• Bank of China
• GL Capital