Chinese orthopaedic medical device enterprise Kanghui Holdings, is to be acquired by US-based medical device manufacturer Medtronic, the world’s largest medical technology company, for $816m. The deal net of Kanghui’s cash, is worth approximately $755m.
Medtronic will assume full control of Kanghui. Kanghui’s previous investors include IDG-Accel, a corporate venturing unit of International Data Group, also backed by venture firm Accel, and international alternative asset fund manager CDH Investment.
Kanghui, which was founded in 1997, raised around $68.4m in a New York flotation in 2010 in which the company sold 6.7 million shares at $10.25.
At the time of the flotation, IDG-Accel owned 21.5% of Kanghui before the IPO, with other backers being venture firms SIG China Investments (18.4%), TDF Capital (12.4%) and CDH Venture Capital (9%).
Kanghui issued 13,173,160 series A shares for $5m in 2006. In 2008 Kanghui’s series B round raised $27.5m from selling 26.1 million shares, followed by a further $2m in April 2009 from 1.8 million shares. Following the B round Kanghui bought medical device maker Beijing Libeier for $26.7m.
Chris O’Connell, Executive vice president of Medtronic commented on the merger:“China is one of the fastest growing medical device markets with significant scale opportunities, and now Medtronic will establish a bigger and more direct local presence, Kanghui brings Medtronic a broad product portfolio, a strong local R&D and manufacturing operation, a vast China distribution network and an exceptional management team. This move will provide Medtronic sustainable advantages in the fast-growing Chinese orthopedic segment, as well as a foothold in the emerging global value segment in orthopedics.”
The deal is expected to close in the next few months subject to shareholder approval.