Ascendent backs $197m take-private for China Automation

Ascendant and Xuan already control 765 million shares, representing a 74.5% stake in the company, according to a regulatory filing. They will offer HK$1.50 per share for the remaining 261 million shares, a premium to the closing price of HK$1.35 on the announcement date of June 14. Following the disclosure of the deal the stock rose to HK$1.39 in morning trading on June 17; as of midday it was trading around HK$1.38.

China Automation specializes in the production of safety and critical control systems and control valves, and claims to be the largest domestic manufacturer of control valves in China. The company historically targeted the petrochemicals industry, but it entered the healthcare market through the acquisition of Suzhou-based hospital operator Yongding Hospital in 2017.

For the year ended December 2018, China Automation reported RMB1.9 billion ($273 million) in revenue, up from INR1.2 billion in 2017. The largest contributor in both years was the petrochemical segment, which grew from RMB1 billion to RMB1.4 billion during 2018. However, the contribution of the healthcare business also grew significantly over the same period, from RMB191 million to RMB468 million. Over the same time, the company went from a RMB192 million net loss to a RMB7.3 million net profit.

Ascendent is currently raising its third China mid-market fund, which launched earlier this year with a target of $800 million. The GP made its initial HK$549.5 million investment in China Automation in 2016, also alongside Xuan, from its previous vehicle, which closed at $600 million in 2015.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Industrials
• Buyouts
• China
• Hong Kong (China)
• manufacturing
• Ascendent Capital