M&A 1H2017 Review China Medical Device Sector

Transcription

1 M&A 1H17 Review China Medical Device Sector

2 Agenda Foreword Overview Strategic Buyers Financial Buyers Mainland China Outbound Deals

3 Foreword Explanation of data presented in this report (1/) The data and analysis here presented are for the China Medical Device sector only The data source of this deck is consistent with that of M&A 1H17 Review and H17 Outlook, which is based on the information compiled by ThomsonReuters, ChinaVenture and analysis, unless stated otherwise Thomson Reuters and ChinaVenture record announced deals. Some announced deals will not go on to complete The deal volume figures presented in this report refer to the number of deals announced, regardless of whether or not a value is disclosed for the deal The deal value figures presented in this report refer only to the deals whereby a value has been disclosed (referred to in this presentation as disclosed value ) Domestic means China including Hong Kong and Macau Outbound relates to mainland China company acquisitions abroad Inbound relates to overseas company acquisitions of Domestic companies

4 Foreword Explanation of data presented in this report (/) Private Equity deals or PE deals refer to financial buyer deals with deal value of over US$1mn and/or with undisclosed deal value, invested mainly by private equity GPs, and also including direct investments by financial institutions and conglomerates which are of the nature of private equity type investing VC deals refer to financial buyer deals with deal value of less than US$1mn and/or with undisclosed deal, but invested by venture capital funds Strategic buyer refers to corporate buyers (as opposed to financial buyers) that acquire companies with the objective of integrating the acquisition in their existing business Financial buyer refers to investors that acquire companies with the objective of realising a return on their investment by selling the business at a profit at a future date and mainly, but not entirely, comprise PE and VC funds 4

5 Overview 5

6 China medical device M&A fell by 41% in the first six months of 17 to US$1.64 billion, the lowest half year amount in the past three years Total deal volume and value of China Medical Device sector 1H14 H14 1H15 H15 1H16 H16 1H17 1H17 Vs H16 % Differnce Vol Value Vol Value Vol Value Vol Value Vol Value Vol Value Vol Value Vol Value Strategic buyers (US$mil) (US$mil) (US$mil) (US$mil) (US$mil) (US$mil) (US$mil) Domestic ,86 47, ,97,87 4 1, ,117 (1%) (44%) Foreign % n.a Total Strategic buyers 6 6 1,86 5,11,54, , ,119 (9%) (44%) Financial buyers Private Equity (44%) (4%) VC % 4% Total Financial buyers (%) (4%) China mainland Outbound SOE n.a n.a POE (1%) 16% Financial buyers 5 4 1, % (66%) Total China mainland Outbound , (6%) (11%) HK Outbound (5%) (4%) Total 4 7 8,97 67,6 54, ,91 1, ,64 (1%) (41%) Source: ThomsonReuters, ChinaVenture and analysis 6

7 Deal values fell across the three main subsectors (strategic, financial and outbound) with fewer bigdeals. Deal value by main category(1h14 1H17) US$mil 6, 5, 4,,, 1, , , ,868, ,86 1,97 1, , H14 H14 1H15 H15 1H16 H16 1H17 Domestic Strategic Buyer Foreign Strategic Buyer Financial Buyer Outbound Source: ThomsonReuters, ChinaVenture and analysis 7

8 Deal volumes also fell in strategic and outbound sectors, but financial buyer remained active Deal volume by main category(1h14 1H17) H14 H14 1H15 H15 1H16 H16 1H17 Domestic Strategic Buyer Foreign Strategic Buyer Financial Buyer Outbound Source: ThomsonReuters, ChinaVenture and analysis 8

9 Strategic Buyers 9

10 Domestic strategic M&A declined by around 44% to touch threeyear lows; while foreign strategic M&A remained inactive Strategic buyer deals volume and value (1H14 1H17) Volume US$mil 7 6,5, ,5, 1, , 5 1H14 H14 1H15 H15 1H16 H16 1H17 Deal volume Domestic Deal volume Inbound Deal value Domestic Deal value Inbound Source: ThomsonReuters, ChinaVenture and analysis 1

11 Surgical, consumables and imaging equipment witnessed increase in 1H17, while IVD (including reagent), the hottest sector in prior years, appeared to cool down in 1H17 Strategic buyer deals by subsector volume(1h14 1H17) H14 H14 1H15 H15 1H16 H16 1H17 IVD Imaging Orthopedics Surgical Consumable Dental Others Source: ThomsonReuters, ChinaVenture and analysis 11

12 Deal values fell across all the subsectors Strategic buyer deals by subsector value(1h14 1H17) US$ mil,5,,5, 1,5 1, , , , H14 H14 1H15 H15 1H16 H16 1H IVD Imaging Orthopedics Surgical Consumable Dental Others Source: ThomsonReuters, ChinaVenture and analysis 1

13 1H17 top deals of strategic buyers above US$1 million Date Deal val Acquirer Target Target Brief introduction announce 1 d11/4/17 (US$ mil) 4 Yu Rong China Resources Wandong industry Imaging Yu Rong agreed to acquire % stake or mil ordinary shares in China Resources Wandong Medical Equipment Co Ltd, from Jiangsu Yuyue Technology Development Co Ltd, for CNY 19.5 (USD. 87) in cash per share, or a total CNY bil (USD mil), in a privately negotiated transaction. 1//17 Dongxu Optoelectronic Tech Co Sichuan Xuhong Guanglian Tech Imaging Dongxu Optoelectronic Technology Co Ltd agreed to acquire the entire share capital of Sichuan Xuhong Guanglian Technology Co Ltd, from Tunghsu Group Co Ltd, the Chinese stateowned Mianyang Technology City Development Investment Group Co Ltd and Sichuan Changhong Electric Co Ltd, in exchange for the issuance of an increased estimated 1.77 mil Dongxu Optoelectronic Technology Co Ltd's new ordinary shares valued at a total CNY 1.79 bil (USD mil), in a 1/1/ Magnum Opus Intl Hldg Ltd Source: ThomsonReuters, ChinaVenture and analysis Golden Meditech Holdings Ltd Healthcare Equipment & Supplies Magnum Opus International Holdings Ltd of China raised its interest to 7.6% from 5.991%, by acquiring further ordinary shares, in Golden Meditech Holdings Ltd, a Hong Kong based manufacturer of medical instruments, for HKD 1.5 (USD.161) in cash per share, in a tender offer to acquire the remaining 64.9% interest of the company. The offer was conditioned upon at least 14.9% shares being tendered. 1

14 Financial Buyers 14

15 VC investors were still active in 1H17 in terms of deal volume, investing in imaging and surgical equipment as well as chasing opportunities in precision medical, minimally invasive surgery,mhealth, smart/small diagnostic device and IT solutions etc. On the other hand, PE investment fell in volume and value. Financial buyer deals(1h14 1H17) Volume H14 H14 1H15 H15 1H16 H16 1H17 Deal volume PE Deal volume VC Deal value PE Deal value VC US$mil 1, Source: ThomsonReuters, ChinaVenture and analysis 15

16 1H17 top PE/VC deals above US$1 million Date announced Deal val (US$ mil) Acquirer Target Target industry Brief introduction 1 7/5/ Investor Group Wuhan Jissbon Sanitary Prod Co Consumables Humanwell Healthcare Group Co. and CITIC Capital China Partners acquired 9% stake of Wuhan Jissbon Healthcare Equipment for USD 1.99 mil together. Source: ThomsonReuters, ChinaVenture and analysis 16

17 Mainland China Outbound Deals 17

18 Under muchpublicized curbs, outbound M&A fell 1% in volume with POE while kept stable in volume with financial buyer under a low level; SOE did not pursue any outbound deals Mainland in outbound deals by investor type(1h14 1H17) Volume US$mil 1, 1, H14 H14 1H15 H15 1H16 H16 1H Volume SOE Volume POE Volume Financial buyer Value SOE Value POE Value Financial buyer Source: ThomsonReuters, ChinaVenture and analysis 18

19 1H17 top Mainland China outbound deals above US$5 million Date Deal val announced (US$ mil) Acquirer Target Target industry Brief introduction 1 5/1/17 8 Fosun Pharma Goldcup Consumerables Shanghai Fosun Pharmaceutical (196) said the company and controlling shareholder Fosun International (656) agreed to set up a special purpose vehicle (SPV) and through which to contribute in an aggregate amount of up to US$8 million to purchase 44,645 shares in Goldcup (target company) held by PBM and subscribe for 5,55 shares to be issued by the target company. Source: ThomsonReuters, ChinaVenture and analysis 19

20 Developed economies continue to be the favoured outbound destinations, among which, Europe and North America came in top two in terms of volume in 1H17. Outbound M&A deal volume by region of destination 1H17 vs. H16 North America Europe Asia South America Africa Oceanic Source: ThomsonReuters, ChinaVenture and analysis 1H17 H16

21 Contacts Xun Tang China Pharmaceuticals & Life Sciences Industry, Transaction Services, Partner Shanghai Tel: +86 (1) 96 Janelle Fei China Pharmaceuticals & Life Sciences Industry, Transaction Services, Associate Director Shanghai Tel: +86 (1) 59 This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 17 PricewaterhouseCoopers Management Consulting (Shanghai) Limited. All rights reserved. refers to the China member firm, and may sometimes refer to the network. Each member firm is a separate legal entity. Please see for further details. CN1798C1