On December 17, 2014, PKU Healthcare Tumor Hospital Management Co., Ltd. (“Tumor Hospital Management Company”, a subsidiary of PKU Healthcare Corp. Ltd.), PKU Healthcare Industry Fund Management Co., Ltd. (“PKU Healthcare Industry Fund”, the above mentioned three companies referred to together as “PKU Healthcare”) signed Share Purchase Agreement with New Journey Hospital Group Ltd., New Journey Investment Group Ltd., New Enterprise Associates 13, L.P. and NEW Ventures 2011, Limited Partnership (jointly referred to as “NEA”), and China Health Investment Fund Co., Ltd. (CHIC). It is planned, by offshore investment, to invest US$ 41,228,527, through an offshore holding platform to subscribe for new shares and buy part of old shares, so as to acquire 65% of the offshore company New Journey Yiyuan Group, as well as the de facto control of the domestic companies, such as Beijing New Journey Tumor Hospital Co., Ltd. (“New Journey Tumor Hospital”), New Journey Wisdom (Beijing) International Medical Technology Co., Ltd. (“New Journey Wisdom”), etc. Jingtian & Gongcheng is entrusted by PKU Healthcare to participate in this acquisition deal, and lead all relevant domestic and foreign legal due diligence, design and development of deal structure, drafting of Chinese/English documents and negotiations.
Tumor Hospital Management Company is wholly owned by PKU Healthcare for the consolidation of tumor treatment industry. PKU Healthcare Industry Fund is an equity investment professional platform led by Founder Group for the reform and integration of the healthcare industry. New Journey Group is a healthcare industry investment platform jointly set up at Cayman Islands by domestic founders, financial investor NEA, and CHIC to serve China’s healthcare market. It controls New Journey Tumor Hospital, which is a for-profit JV tumor special hospital by New Journey Group and PKU Tumor Hospital. The JV hospital is positioned to provide high-end tumor treatment, with 150 beds approved. The construction area of the first stage is 12,000 square meters, with 100 beds (pilot run). And the second stage is expected to start operation in June 2015, with an extra 50 bed.
This acquisition is an important step for PKU Healthcare and PKU Healthcare Industry Fund for their consolidation efforts in the healthcare industry. It’s also the first time that domestic hospitals are controlled by acquiring controlling stake in an offshore company through cross-boarder transactions, which has caught key attentions from the industry and the capital market. After the deal is concluded, New Journey Tumor Hospital will become the international treatment center of PKU Tumor Hospital, and be fully integrated with the medical resources of PKU healthcare system.