China-based Rici Healthcare Holdings Limited (HKG: 1526), also known as Rich Healthcare, is set to acquire 1,672,140 shares of Unicorn II Holdings Limited for RMB 180 million (USD 24.7 million). The acquisition aims to strengthen Rici Healthcare’s position in the rapidly growing private medical services sector in China.
Market Growth in Private Medical Institutions
According to Frost & Sullivan, the market value of private medical institutions in China has increased significantly over the past few years. It grew from RMB 335.8 billion (USD 46.2 billion) in 2016 to RMB 802.4 billion (USD 110 billion) in 2021, with a five-year compound annual growth rate (CAGR) of 19%. This growth is expected to continue, reaching RMB 1.421 trillion (USD 195 billion) by 2025 at a 15.4% CAGR over the five-year period.
Unicorn II Holdings Limited Performance
Unicorn II Holdings Limited, a leading private medical services provider in China, has shown strong revenue performance in recent years. The company generated RMB 2.449 billion (USD 337 million) in 2019, RMB 2.261 billion (USD 311 million) in 2020, and RMB 2.804 billion (USD 386 million) in 2021.
Merger Agreement and Consortium
In August 2021, New Frontier Health Corporation (NYSE: NFH), the investment arm of the Shanghai/Hong Kong-based conglomerate New Frontier Group, entered into a definitive merger agreement. The deal involves a merger with Unicorn II Holdings Ltd and its related subsidiaries, resulting in NFH becoming a wholly-owned subsidiary of Unicorn II. The transaction values the hospital group at approximately USD 1.582 billion. Other members of the buying consortium include Fosun Pharma, HMJ Holdings Ltd, an NFH-affiliated investment vehicle, Vivo Capital Fund IX (Cayman), Goldman Sachs Asset Management, and others.
Future Outlook
The acquisition by Rici Healthcare is expected to enhance its capabilities in the private medical services sector, leveraging the growth potential of the market. This strategic move aligns with the broader trend of increasing investment in private healthcare in China, driven by rising demand for high-quality medical services.-Fineline Info & Tech
