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8-K - FORM 8-K - CHINDEX INTERNATIONAL INC | e61059731frm8k.htm |
EX-10.3 - EXHIBIT 10.3 - CHINDEX INTERNATIONAL INC | e61059731ex10_3.htm |
EX-10.1 - EXHIBIT 10.1 - CHINDEX INTERNATIONAL INC | e61059731ex10_1.htm |
EX-10.2 - EXHIBIT 10.2 - CHINDEX INTERNATIONAL INC | e61059731ex10_2.htm |
FOR RELEASE June 14,
2010
Chindex
International and Fosun Pharma
Agree
to Form Medical Products Joint Venture
and
Agree to Stock Sale
Fosun
Pharma Agrees to Increase Ownership Stake in Chindex International up to 25
Percent
Joint
Venture Would Leverage Scale and Presence in China’s Medical Device
Market
Bethesda, Maryland – June 14,
2010 - Chindex International, Inc. (“Chindex”) (NASDAQ: CHDX), a leading
independent American provider of Western healthcare products and services in the
People’s Republic of China, and Shanghai Fosun Pharmaceutical (Group) Co., Ltd.
(“Fosun Pharma”), a leading manufacturer and distributor of western and Chinese
medicine and devices in China, today announced that they have entered into a
strategic alliance to utilize respective strengths in China’s medical
industry.
The
strategic alliance includes the agreement on basic terms by Fosun Pharma and
Chindex to form Chindex Medical Limited (the “Joint Venture”), a joint venture
focused on manufacturing and distributing medical devices in China. The Joint
Venture would merge and operate Chindex’s Medical Products division and certain
of Fosun Pharma’s medical device businesses in China. The Joint Venture would be
owned 51% by Fosun Pharma and 49% by Chindex. The closing of the Joint Venture
is subject to the final negotiation and execution of definitive documents in
accordance with a current term sheet.
The
strategic alliance also includes a definitive agreement by Fosun Pharma to
purchase from Chindex up to 1,990,447 shares of Chindex common stock at $15 per
share, which when aggregated with other Chindex shares owned by Fosun Pharma
would gain Fosun Pharma up to 4,229,701 shares, representing a 25% ownership
stake in Chindex, subject to certain stockholder limitations. The stock sale is
expected to raise an aggregate of approximately $30.0 million, the net proceeds
of which are expected to be used, among other things, to continue expansion of
the Company’s United Family Healthcare network. Under the terms of the
agreement, the sale of the shares of common stock would be completed in two
closings, the first of which is expected to occur in the second quarter of the
current fiscal year, subject to certain customary closing conditions, and would
relate to approximately one-half of the shares to be purchased. The
closing of the balance of the shares would occur subject to the consummation of
the Joint Venture as well as certain customary closing conditions. In
connection with the transactions, until the occurrence of certain events, Fosun
Pharma has agreed to
certain
voting and standstill limitations. The foregoing description of the
agreements is qualified in its entirety by reference to the full text of the
agreements filed today with Chindex’s Form 8-K.
Roberta
Lipson, President and CEO of Chindex said, “We are delighted to forge this
landmark partnership with Fosun Pharma and we welcome their participation and
expertise as one of our major shareholders. Their credibility and
presence in China is an asset to us as we execute our plan to build the leading
network of premium care hospitals and clinics across the
country. This strategic alliance is mutually beneficial for several
reasons and we are particularly excited about launching Chindex Medical Limited,
our proposed joint venture in medical device distribution. Fosun
Pharma already operates business in this area, and the addition of our medical
products division is a great fit which should drive scale and a deeper presence
across China.”
Chen
Qiyu, Chairman of Fosun Pharma said, “Fosun Pharma is pleased to be partnering
with Chindex, including establishing Chindex Medical Ltd. Chindex is a well
known name in the medical device markets in China. We look forward to leveraging
both companies’ strengths to consummate and grow the venture in the future. In
addition, we are happy to be an important shareholder of Chindex as we believe
both the Chindex and the United Family Healthcare brands have great potential as
the demand for premium healthcare services accelerates along with China’s
growing economy. We believe that United Family Healthcare is the
leading private premium healthcare services brand in the country
today.”
Financial
Impact of the Transaction
Income
statement: Upon formation of the Joint Venture expected later this year, Chindex
expects to no longer consolidate the results of its Medical Products
division. Using the equity method, the Company would recognize the
proportional contribution from the Joint Venture. The use of the
equity method would also reduce the volatility of the Company’s revenue and
income from operations of the division, which was experienced due to the timing
of shipments of medical products.
Balance
sheet: Upon closing, the stock sale is expected to raise an aggregate of
approximately $30.0 million. Chindex believes the increased capital
will allow more rapid expansion of the United Family Healthcare network. Chindex
currently has expansion projects underway in Beijing, Shanghai, Guangzhou and
Tianjin. Additional development projects are under negotiation in Chengdu,
Hangzhou, Qingdao and Dalian.
About Chindex International,
Inc.
Chindex
is an American health care company that provides health care services and
supplies medical capital equipment, instrumentation and products to the Chinese
marketplace, including Hong Kong. Health care services are provided through the
operations of its United Family Healthcare division, a network of private
primary care hospitals and affiliated ambulatory clinics in China. The Company’s
hospital network currently operates in Beijing, Shanghai and Guangzhou. Chindex
sells medical products manufactured by various major multinational companies,
including Siemens AG and Intuitive Surgical, for which the Company is the
exclusive distribution partner for the sale and servicing of color ultrasound
systems and surgical robotic systems respectively. It also arranges financing
packages for the supply of medical products to hospitals in China utilizing the
export loan and loan guarantee programs of both the U.S. Export-Import Bank and
the German KfW Development Bank. With twenty-eight years of experience,
approximately 1,300 employees, and
operations
in China, Hong Kong, the United States and Germany, the Company’s strategy is to
expand its cross-cultural reach by providing leading edge healthcare
technologies, quality products and services to Greater China’s professional
communities. Further company information may be found at the Company’s website,
http://www.chindex.com.
About Shanghai Fosun
Pharmaceutical (Group) Co., Ltd.
Shanghai
Fosun Pharmaceutical (Group) Co., Ltd (SHA:600196), is engaged in research and
development, manufacturing and distribution of Western chemical medicines,
traditional Chinese medicines and active pharmaceutical ingredients as the core
business, and taking the leading market role in medical diagonosis, medical
services and devices. Its products have leading market positions in
the treatment of liver related diseases, diabetes, gynecology and clinical
diagnosis in China. Fosun Pharma’s holding subsidiary Guilin Pharma is also a
leading company in anti-malaria medicine in the global market for which it is
China’s only WHO direct supplier. Sinopharm Group Co., Ltd.,
invested by Fosun Pharma, has been one of the largest wholesale and retail
distribution networks for pharmaceutical products in China. Sinopharm Group
listed on the Hong Kong Stock Exchange in 2009. Fosun
Pharma’s principal executive office is located in Shanghai, China. For more
information, please visit:http://www.fosunpharma.com.
Certain
statements in this release may constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. In addition, we or our representatives have made or continue to
make forward-looking statements, orally or in writing, in other
contexts. These forward-looking statements generally can be
identified by the use of terminology such as “may,” “will,” “expect,” “intend,”
“estimate,” “anticipate,” “plan,” “foresee,” “believe” or “continue” and similar
expressions, or as other statements that do not relate solely to historical
facts. These statements are not guarantees of future performance and involve
risks, uncertainties and assumptions that are difficult to predict or
quantify. Management believes these statements to be reasonable when
made. However, actual outcomes and results may differ materially from what is
expressed or forecasted in these forward-looking statements. As a result, these
statements speak only as of the date they were made. We undertake no obligation
to publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. In view of such uncertainties,
investors should not place undue reliance on our forward-looking statements.
Such forward-looking statements involve known and unknown risks, including, but
not limited to, those identified in “Risk Factors” in the Company’s filings with
the SEC, to which we refer you. These risks also include without limitation that
there can be no assurance that the Company will consummate the transactions
described above on the projected timetable or at all nor that specific terms
thereof will be effectively enforceable, and that completion of the Joint
Venture will depend on the negotiation of numerous business terms not reflected
in the current term sheet or only reflected in general terms, including the
respective operations to be contributed by the parties, which terms may vary as
a result of, among other things, negotiations, due diligence, operational
developments of the businesses to be contributed and the industries thereof,
valuation considerations and external factors.