PE consortium completes take-private of China's WuXi PharmaTech
A consortium comprising the founder and CEO of WuXi PharmaTech and several PE investors has completed the privatization of the China-based provider of contract R&D services to global pharmaceutical companies.
The deal, which values WuXi PharmaTech at approximately $3.3 billion, won approval from two major shareholder proxy advisory firms in late November and this was followed by formal approval through a shareholder vote. The consortium is paying $46.00 per share for all outstanding American Depository Shares, according to a regulatory filing.
Ally Bridge, Boyu Capital, Temasek Holdings, Hillhouse Capital, Ping An Insurance, Yunfeng Capital, Sequoia Capital, Legend Capital, and an investment entity connected to Shanghai Pudong Development Bank are participating in the deal alongside Ge Li, the founder and CEO. Financing will come through a combination of third-party debt and equity provided by existing investors rolling over their holdings.
It is the second-largest private equity-supported privatization of a US-listed Chinese company, after Focus Media and ahead of Giant Interactive. Both Focus and Giant have since announced plans to re-list domestically through reverse mergers.
WuXi PharmaTech - also known as WuXi AppTec - was set up in 2000 by four founders in a single laboratory. It started offering pharmaceutical and biotechnology R&D outsourcing services the following year. Multinational pharmaceutical companies were able to contract out the synthesis of small molecules that occurs at the beginning of the drug discovery process to lower-cost Chinese laboratories.
Following an IPO in 2007, WuXi PharmaTech built an integrated R&D services platform covering the entire drug discovery and development value chain, including capabilities in genomics and bioinformatics. It has 9,000 employees and five million square feet of laboratory and manufacturing space in operation or under construction.
Revenue came to $674.3 million in 2014, up 16.6% year-on-year. Of this, $492 million came from laboratory services and $182.3 million from manufacturing services. The majority of this revenue is generated from customers in the US and Europe. Net income reached $112.2 million in 2014, down from $114.6 million the year before.
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