Humanwell Healthcare 人福醫藥 intends to acquire Roche medical device distributor in China !!

Humanwell Healthcare Shows Consolidation Is Hot in China's Health Care 7/13/2012 @ 1:07 Humanwell Healthcare, a leading medical company in Hubei province, is awaiting approvals of a private placement plan to acquire the distributor of Roche Diagnostic Technology in China. The company plans to raise $162 million (1.03 billion Chinese yuan) to purchase an 80% stake in Beijing Baron Medical Equipment, the largest distributor of Roche's in-vitro diagnostic products in China. Baron Medical also distributes blood coagulation products made by French life science reagent company Stago. Humanwell, a Shanghai-listed company, registered revenue of $570 million (3.62 billion Chinese yuan) in 2011. Wang Xuehai, Chairman of Humanwell Healthcare, joined the company in 1998 when he was 24 and became the president at age 29. According to the company website, Wang stated this week that consolidation through mergers and acquisitions is a major trend in China's medical industry. He said the M&A integration will increase the company's efficiency. Private Money Pours Into China's Healthcare, Boosting Fortune For Ciming Health Checkup Founders Humanwell's moves underline the trend in China: the country's healthcare reform and the accompanying regulatory changes are driving increasing levels of consolidation in the medical industry. Analysts and professionals in the field expect that the strongest domestic firms will gain from intensifying competition in the markets and become attractive targets for multinational companies looking to expand in emerging channels in China and worldwide. In June, Hong Kong-listed China Pharmaceutical Group announced it will pay $1.2 billion (8.98 billion HK dollars) to acquire pharmaceutical products maker and distributor Robust Sun Holdings Ltd. The assets to be acquired include a researcher and manufacturer of drugs for use in diseases relating to central nervous system. The deal will be settled by a combination of new shares and convertible bonds, said the company in a filing to Hong Kong Stock Exchange. In a report on China's health care market released this week, Cowen and Company analyst Katherlne Lu said industry consolidation will likely accelerate as the Chinese government promotes scale and a centralized procurement system. In the recently issued "Opinions Regarding Public Hospital Reform", the Chinese government clearly set the goal to reduce public hospitals' reliance on profit-making from medical consumables. The provincial governments were encouraged to explore a tender system for centralized drug and high-end medical consumable purchases. Lu said limiting the number of winning bids in provincial tenders should bolster market shares for top companies. Meanwhile, domestic leaders also carry attractive strategic value for multinationals companies looking to expand in China's emerging channels and worldwide. In May, medical device powerhouse Johnson & Johnson made its first purchase in Chinese medical device industry. It said it would acquire Guangzhou Bioseal Biotechnology Co Ltd, a bio-pharmaceutical company developing a biologic product for controlling bleeding during surgery. Financial terms of the transaction were not disclosed. According to Lu's research, China's domestic medical device market increased at a 5-year compound annual growth rate of 25.6%, to $21 billion (135 billion Chinese yuan) in 2011, far outpacing the 5% growth in the global medical equipment market. Lu said the Chinese government's $125 billion health care reform fund is the single largest driver for the medical device sector, along with increasing patient visits, improving health care affordability and accessibility, and fueling innovation.