Citic Private Equity and the chief executive of Nasdaq-listed 3SBio, a Chinese biotech firm, have completed a take-private deal that values the company at $370 million and paves the way for an offering in Hong Kong.
Under the terms of the merger agreement, holders of the company's ordinary shares and American depositary shares (each representing seven shares) will receive $2.39 a share or $16.70 per ADS.
That gives shareholders a 44% premium over 3SBio’s share price in September, before the original proposal, and 10% over the closing price in mid-April, when the revised offer was made.
The deal is the latest in a trend of take-privates by Chinese companies listed in the US, many of which have struggled to maintain their value amid a series of accounting scandals.
The merger was financed through a combination of debt, equity and cash. To implement the buyout, the consortium merged 3SBio into a Cayman company called Decade Sunshine, with Decade Sunshine owning 100% of 3SBio after the merger.
3SBio is based in Shenyang in China and is focused on researching, developing, manufacturing and marketing biopharmaceutical products
Jing Lou, 3SBio’s chief executive, will be hoping that a listing in Hong Kong will improve the company’s valuation.
China Citic Bank International provided debt financing for the transaction, while Citic PE provided the equity financing.
Jefferies advised the independent committee assessing the deal on behalf of 3SBio, while Bank of America Merrill Lynch advised the buyers. Cleary Gottlieb and Walkers provided legal advice to the committee, while Skadden Arps and Conyers advised the buyers, and Akin Gump advised Citic PE.
