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Shanghai Pharma Completes the Privatization of Australia-Based Listed Company Vitaco, Seeking Global Layout in the Big Health Industry

[The “Healthy China” development program has been upgraded to a national strategy and the big health-related industry will soon enjoy a booming period of development. On August 3, 2016, Shanghai Pharma, SIIC, Primavera, Zeus and Vitaco signed a five-party agreement, under which Vitaco, an Australia-based listed company, will be privatized. Shanghai Pharma has abundant domestic online and offline channel resources, and Vitaco has high-quality health care product lines. This acquisition may well be interpreted as an important step taken by Shanghai Pharma to seek layout in the big health industry, share the benefit of future growth in this area and promote its international development. The deal was completed on December 16, 2016.The merger gets favorable comments in the industry and it is judged to be able to build sound resource complementarity and collaborative advantage.]

Shanghai Pharma released an announcement on August 4, 2016, indicating that its wholly-owned subsidiary SIIC Medical Science and Technology (Group) Ltd. (“SIIC”) and PV Zeus Limited (“Zeus”), a wholly-owned subsidiary of Primavera Capital Fund II L.P. (“Primavera”) plan to jointly privatize ASX-listed company Vitaco Holdings Limited (ASX:VIT, hereinafter referred to as “Vitaco”). Shanghai Pharma will acquire a 60% stake in Vitaco for about RMB 938 million.

Registered in Victoria, Australia and listed on the Australian Securities Exchange on September 16, 2015, Vitaco is a nutrition manufacturer engaged in the development, production and marketing of a series of nutrition, health and health-care brand products. It was set up by merging Healtheries and Nutra-Life, both being time-honored companies, in 2007. Founded in 1904, Healtheries is a New Zealand-based company engaged in the production of comprehensive health food and supplements. Founded in 1967, Nutra-Life is a New Zealand-based company engaged in the production of supplements and sports nutrition products.

The co-investor Primavera is a limited partnership fund engaged in private equity investment subject to the management by Primavera Capital Management Limited (together with its affiliates, hereinafter referred to as “Primavera Capital”). A global investment company based in Asia, Primavera Capital has flexible and diversified investment strategies, while focusing on and seeking t growth capital and other investment opportunities such as acquiring the controlling power. Together with its affiliates, Primavera Capital’s asset under management and committed capital exceed US$ 4.0 billion.

On August 3, 2016, Shanghai Pharma signed the Scheme Implementation Agreement with regard to the deal in Sidney, Australia. Two months later, Vitaco received on October 21 an approval notice issued by Australia Foreign Investment Review Board and, in the meantime, Shanghai Pharma completed on October 20 the filing procedure with regard to the deal at the State-Owned Assets Supervision and Administration Commission of Shanghai Municipal Government. On October 26, 2016, Vitaco was approved by the Federal Court of Australia (FCA) to convene an extraordinary general meeting to review the deal. On the same day, the Scheme Booklet submitted by Vitaco got registered at Australian Securities and Investment Commission. On November 1, 2016, the deal was approved by the Overseas Investment Office, New Zealand. On November 30, the deal was approved by Vitaco’s stockholders' meeting. On December 6, the deal was approved by the Federal Court of Australia. On December 16, 2016, the deal was completed.

Thanks to the stable development strategy and the operating system improved continuously over the past few years, Shanghai Pharma has entered the 100 billion RMB operating revenue club by virtue of its excellent performance in 2015. As one of the few listed pharmaceutical companies holding a leading position in both the pharmaceutical product manufacturing and distribution market sector, Shanghai Pharma also demonstrates sound performance in the Q3 2016 report. The “Healthy China” development program has been upgraded to a national strategy and the big health-related industry will soon enjoy a booming period of development, according to the insiders. This acquisition may well be interpreted as an important step taken by Shanghai Pharma to broaden its international view and seek layout in the big health industry with an expectation to enjoy the benefit of future growth in the industry. Shanghai Pharma has abundant domestic online and offline channel resources. SPH Cloud Health, an e-commerce company established by Shanghai Pharma in March 2015, integrates online solutions and offline channel resources with an effort to create an innovative business model by seeking such layout as the “e-commerce platform online plus three tiers of network offline”, which will help enhance circulation efficiency, deliver better consumption experience and more convenient services. Vitaco, on the other hand, has high-quality health care product lines. The merger of such two excellent companies will be able to create a large-scale health care product lines and knock-out products and to build sound resource complementarity and collaborative advantage.

 

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