PE-Backed Luye Pharma Prices $764M HK IPO

Yantai, Shandong Province-based Chinese drug-maker Luye Pharma Group has priced its Hong Kong IPO, planning to sell 999.6 million shares at HK$5.38 to HK$5.92 each, according to media reports.

This means the IPO will raise as much as US$764 million, slightly higher than previously estimated US$750 million.

The IPO has already secured six cornerstone investors, who will purchase a total of US$280 million worth of shares during the IPO. Hong Kong-based asset manager Value Partners Group Ltd. is to purchase US$100 million, while biotech investment firm Orbimed Advisors and Prime Capital will buy US$50 million shares each.

In March 2012, CDH Investments, CITIC Private Equity and New Horizon Capital acquired a majority stake of Luye Pharma for an undisclosed amount from Asian private equity firm MBK Partners in a secondary transaction.

The three private equity firms, together with Luye Pharma’s founders, took the company private in August 2012 through a management buyout.

The management team and the three private equity firms owned 92.63% of the company before the buyout. Luye Pharma was then delisted from the Singapore stock exchange after the privatization deal.

Luye Pharma listed on the Singapore stock exchange’s main board in 2004 under the name of "Asia Pharm".

In Luye Pharma’s latest IPO documents, the Government of Singapore Investment Corporation Pte (GIC) is listed as a shareholder, besides CDH Investments and CITIC Private Equity Funds Management. It is unclear when and how GIC become a shareholder.

In the past few years, private equity firms have taken dozens of Chinese companies private, hoping to re-list them elsewhere for better valuations.

Founded in 1994, Luye Pharma manufactures medical products for oncology, cardiovascular, orthopedic, gastroenterology and central-nervous-system diseases.

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