Simcere To Go Private In Hony-Backed Management Buyout

Nanjing, Jiangsu Province-based Simcere Pharmaceutical Group says it has entered into a definitive agreement for a management buyout led by its founder Ren Jinsheng for around US$490 million.

The buyer is a consortium headed by Simcere’s founder Ren Jinsheng. Simcere’s current CEO Liu Hongquan and Beijing-based private equity firm Hony Capital are also participating in the take-private deal. The consortium together owns 78% of Simcere.

The investors are offering US$9.66 for each of Simcere’s American depositary share. It represents a 20% premium to the stock’s closing price on March 8, 2013 when Simcere announced it had received the "going-private" proposal.

After the completion of the deal, Simcere will no longer be listed on the New York Stock Exchange.

Simcere has entered into a debt arrangement with China Merchants Bank’s New York branch for debt financing of US$85 million.

In the transaction, UBS AG is serving as financial advisor to the Special Committee, while Shearman & Sterling LLP is serving as U.S. legal advisor.

Cleary Gottlieb Steen & Hamilton LLP is serving as U.S. legal advisor to the buyer group.

China Expert Network
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