The offer price from the group taking the company private – known as New WuXi Life Science Limited and subsidiary WuXi Merger Limited -- represents a 16.5% premium over the closing price of the company’s stock on April 29 of $39.50. Subject to shareholder approval, the deal is expected to close during Q4 of this year.
The group buying WuXi include affiliates of or funds managed or advised by Ally Bridge Group, shareholder Hillhouse Fund II, as well as Ge Li, chairman and CEO of WuXi and several other executives.
The buying group intends to fund the deal through a combination of cash contributions, and the proceeds from committed and underwritten loan facilities.
Neal McCarthy, managing director of the investment bank Fairmont Partners, previously told us that it seems as though WuXi is withdrawing from the NYSE to go private so that it can then enter the Shenzhen stock exchange, where it can compete with the likes of China-based CRO Tigermed. Tigermed is currently valued about $400m more than WuXi, even though Tigermed’s revenue and profits are about one-fifth the size of WuXi’s.
Also on Friday, WuXi reported its most recent quarterly earnings, with 18.8% year-over-year growth in revenue and double-digit growth in all four of its business segments.
But the company is also seeing its investments in recent new businesses, such as in genomics/bioinformatics, e-commerce and China healthcare initiatives develop “more slowly than we had anticipated,” Li said.
WuXi has been ambitious with its direction recently, as in May it began construction in Wuxi city of the largest mammalian cell culture manufacturing facility using disposable bioreactors in the world.
The company also expanded its biologics business by joining three Chinese institutional investors to acquire Ambrx, a clinical-stage biopharma company focused on the discovery and development of antibody-drug conjugates.
Also in May, the company launched the labnetwork.com, a global e-commerce platform connecting buyers and sellers of research chemicals and reagents, and it completed construction of a cell therapy manufacturing facility in Philadelphia for non-gene-mediated cell therapies, and began construction of a second facility for manufacturing of CAR-T and other gene-mediated cell therapies and gene therapies. And the company recently completed the expansion of its toxicology facility in Suzhou, China.
“So, to sum up, our revenue growth in our core business was good in the second quarter and is expected to remain good for the remainder of 2015. On the basis of this core strength, we’re confirming our full year 2015 revenue guidance for the total company of $790m to $800m,” Li added.