Huadong Medicine to Acquire 100% Stake in Spanish High Tech for EUR65m

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Chinese pharmaceutical company Huadong Medicine [000963:CH] released a statement on February 17, announcing that the company’s wholly-owned subsidiary Sinclair Pharma has inked an equity purchase agreement with Cocoon Business Investments to acquire a 100% stake in High Technology Products for EUR65m, as reported by 36kr on the same day. In addition, under the agreement, the two parties also signed a deal for a sales milestone payment of no more than EUR20m. Huadong added that the acquisition plan is still pending approval from domestic and overseas investment authorities and relevant supervisors in mainland China.

The move this time showed Huadong’s ambition of betting in the aesthetic medicine equipment market, which may be its new revenue stream. Established in 2001, headquartered in Barcelona, and with a registered capital of EUR60,140, High Technology Products focuses on developing, producing, and selling aesthetic medicine devices, such as fat-freezing machines and laser hair removal equipment. The Spanish target firm achieved operating revenues of EUR12.32m and EUR22.97m in the first three quarters of 2020 and 2019, while its net profit hit EUR602,000 and EUR5.11m over the same period. As for Huadong's performance, the enterprise’s operating revenues decreased by 7.70% YoY to RMB25.5bn in the first three quarters of 2020, while the concurrent net profit attributable to shareholders increased by 8.06% YoY to RMB2.39bn. Besides, the revenue from its aesthetic medicine business accounted for 0.76% of the total revenues in 1H20.

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