Carlyle-backed Adicon trades up after $52m Hong Kong IPO
Adicon Holdings, a China-based independent clinical laboratory (ICL) services provider backed by The Carlyle Group, gained 12% on debut following a HKD 408.9m (USD 52.2m) Hong Kong IPO.
The company sold approximately 33.2m shares at HKD 12.32 apiece, according to a filing. The offering included 15.9m shares held by Feng Lin, who founded Adicon with Jixun Lin in 2004. No other shareholders made partial exits. The stock ended June 30 at HKD 13.80, giving Adicon a market capitalisation of around HKD 8.9bn (USD 1.1bn).
Carlyle invested USD 213.6m in 2018 as part of a USD 265.9m Series A round also featured Chinese healthcare services provider Meinian Onehealth. The implied post-money valuation was USD 436m. An extension of USD 14.8m closed the following year. Carlyle remains the largest individual shareholder post-IPO with 38.92%, while Meinian Onehealth has 3.97%.
Adicon’s valuation rose to USD 1.06bn in 2020 with a USD 88m Series B led by Khazanah Nasional, which contributed USD 45m. BlackRock, Cenova Capital, Lake Bleu Capital, and OrbiMed also participated. Khazanah now owns 3.73%; all other investors are sub-2%.
Five cornerstone investors accounted for HKD 291.3m of the offering. Jixun Lin was joined by entities controlled by four strategic players: Shenzhen Mindray Bio-medical Electronics, Shenzhen New Industries Biomedical Engineering, Fosun Diagnostics, and Shenzhen Salubris Pharmaceuticals.
Adicon provides testing services to hospitals and health check centres through 33 self-operated laboratories. It offers over 4,000 medical diagnostic tests. Testing volume rose from 60.1m in 2020 to 164.9m in 2022. There is also a dedicated cold-chain logistics network covering more than 19,000 customers across 30 provinces and municipalities.
Adicon claims to be one of China's top three ICL service providers by revenue for 2020-2022. Revenue reached CNY 4.86bn in 2022, up from CNY 3.38bn the previous year. Diagnostic testing services account for 90% of annual revenue, with the rest coming from sales of medical products. Net profit increased from CNY 322.3m in 2021 to CNY 684.9m in 2022.
“Since Carlyle’s investment in Adicon in 2018, the company has transformed from being a founder-led business into a corporation that is led by a board of directors and an experienced management team,” said Ling Yang, a managing director and co-head of healthcare at Carlyle Asia, in a statement. She added that China’s ICL market is still in a nascent stage and there remains significant room for growth.
The Hong Kong Stock Exchange has seen a surge in filings by private equity-backed companies in recent weeks. They include artificial intelligence player Mobvoi, e-commerce software-as-a-service (SaaS) provider Jushuitan, and O2O retail platform Dmall, as well as J&T Global Express, Insilico Medicine, Unisound AI Technology, Baiwang, Qiniu, SATP Holding, RoboSense, and Lianlian DigiTech.
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