Hony-backed healthcare platform acquires TCM hospital
Hospital Corporation of China (HCC), a buyout platform established by Hony Capital, has acquired a 70% stake in Jiande Hexu Enterprise Management, owner of a traditional Chinese medicine (TCM) hospital and other healthcare businesses, for RMB483 million ($73 million).
The purchased assets include Jiande Hospital of Traditional Chinese Medicine, a privately-held TCM general hospital in Hangzhou; DJ Medicines, a distributor of pharmaceutical products to Jiande Hospital and third-party customers; and DJ Pharmaceutical Technology, which holds certain land use rights to build healthcare services facilities.
Jiande Hexu has become a subsidiary of HCC, with the remaining 30% interest held by the target company’s founder.
HCC plans to expand Jiande Hospital’s service range and geographic coverage, with a view to building a regional medical service center that focuses on common and chronic diseases. HCC said in a filing that Jiande Hospital is close to Yangsi Hospital, which Hony bought in 2014. It hopes to exploit synergies in terms of shared medical resources and intra-group cooperation.
Jiande Hexu posted RMB155 million in revenue last year, compared to RMB150 million in 2015. Net profit fell to RMB919 million from RMB4 million over the same period.
HCC currently manages Yangsi and Fuhua Hospital, but Hony wants it to serve as a platform for wider consolidation of the hospital operation and management space. HCC listed on the Hong Kong Stock Exchange in March, and it has since announced three proposed acquisitions of hospitals located in Guangzhou city and Zhejiang province. The transactions have yet to be completed.
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