CITIC Capital makes $3.6b bid for China Biologic Products
CITIC Capital has submitted a take-private bid for China Biologic Products that values the US-listed biopharmaceutical developer at approximately $3.65 billion.
The private equity firm is willing to buy all outstanding American Depository Receipts (ADRs) in the company for $110 apiece in cash, according to a filing. This represents a 34% premium to the June 15 closing price. The share price spiked on June 18, peaking at $102.55, and ended the following day’s trading at $97.30.
CITIC Capital currently owns 5.1% of China Biologic. The largest individual shareholder is Hong Kong-listed medical device manufacturer PW Medtech with 16.67%. China Biologic bought an 80% stake in TianXinFu, a subsidiary of PW Medtech, in January through an all-share deal. Warburg Pincus was previously an investor in China Biologic but has since exited its stake.
The company produces plasma-based biopharmaceuticals for the prevention and treatment of life-threatening diseases and immune-deficiency related diseases. It manufactures 20 different dosage forms, but most of the revenue comes from human albumin, which is used to treat conditions such as blood loss trauma, and intravenous immunoglobulin. Products are distributed to about 600 hospitals and clinics across China.
China Biologic, which was founded in 2002 and listed on NASDAQ in 2009, generated $370.4 million in revenue in 2017, up from $341.2 million the previous year. Over the same period, net profit fell from $104.8 million to $67.9 million.
CITIC Capital is currently deploying CITIC Capital China Partners III, which is expected to close at $2 billion. The private equity firm has already closed the US dollar-denominated portion at the hard cap of $1.57 billion and is seeking a further RMB3 billion ($439 million) in renminbi.
The fund pursues control deals in China and overseas. Recent acquisitions include Jiangsu Sky Facility Management, Euromoney Institutional Investor’s financial information database division, English language training provider Wall Street English, New Zealand-based skincare products and fragrances business Trilogy International, and cosmetics industry packaging supplier Axilone.
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