WuXi borrows $165m from Asian banks for M&A deals in 2015
WuXi capital spending is expected to double over the next year as it was approximately $110m in 2014 and will be about $200m in 2015. Recent acquisitions seem to indicate the company is moving away from its core of contract service offerings as they include the purchase of XenoBiotic Laboratories for $37.5m and NextCODE Health for $65m.
"This new loan agreement provides WuXi with the resources to invest in several new business opportunities without impacting the strong growth of our current operations," said Edward Hu, CFO of WuXi.
He also explained that in order to meet the growing demand, the company is building $150m small-molecule manufacturing facilities in Changzhou, China, that will double current capacity by late 2015 or early 2016; biologics commercial manufacturing facilities in Wuxi city that will also cost nearly $150m and be completed by late 2016; and two cell-therapy manufacturing facilities in Philadelphia that will cost about $40m.
Dr. Ge Li, Chairman and CEO of WuXi PharmaTech, added: "While continuously strengthening our existing capabilities, we also see new investment opportunities in the rapidly growing China healthcare market. We need to invest aggressively to extend our research and development capabilities to hospitals, doctors, and patients to capture many of these exciting opportunities."
The company did not respond to a request for comment on what types of companies it was targeting with these new funds.
The borrowing will incur interest at a rate of LIBOR plus 2.89%, including all expenses, and will be repaid in four installments over 18-36 months, WuXi added.
