A Stock Subscription Agreement for an equity private placement has been entered between China Medicine Corporation and One Equity Partners. OEP has agreed to purchase 4,000,000 of the Company's common shares at $3.00 per share and 1,920,000 of the Company's redeemable convertible preferred shares at $30 per share, for an aggregate purchase price of $69.6 million. At the closing of this agreement, CHME will receive $12 million in proceeds while the remaining $57.6 million in proceeds will be placed in escrow until released to fund additional capital expenditures and acquisition projects.
"We are delighted by OEP's endorsement of our business strategy as we move higher in the pharmaceutical value chain by combining manufacturing capabilities with our nationwide distribution network and exciting new products," said Mr. Senshan Yang, Chairman and CEO of China Medicine. "These include our proprietary recombinant Aflatoxin Detoxifizyme (rADTZ), a novel product for removing aflatoxins found in food and animal feed that we believe holds significant potential for future growth. Going forward, our strategy is to focus on developing and building brand recognition nationally to enhance the value of our enterprise."
Ryan Shih, resident partner for OEP based in Hong Kong, said, "OEP is very impressed with China Medicine's management team. With the LifeTech acquisition, the Company is transforming into a vertically integrated distributor and developer of compelling products with attractive growth potential. The Company has established a leading position in China's fast-growing pharmaceutical market, and we believe that the management team has the vision to capitalize on an extensive distribution network for medicines as well as develop innovative new products including new medicines and other products such as rADTZ."
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About One Equity Partners
Established in 2001, One Equity Partners manages approximately $8 billion of investments and commitments for JPMorgan Chase & Co. in direct private equity transactions. One Equity Partners has invested in over 30 companies in a variety of industries including defense, chemicals, healthcare, technology and manufacturing. One Equity Partners' investment professionals are located across North America, Europe and Asia, with offices in New York, Chicago, Menlo Park, Frankfurt and Hong Kong.
About China Medicine Corporation
China Medicine Corporation is a developer and leading distributor of prescription and over- the-counter ("OTC") drugs, traditional Chinese medicine products, herbs and dietary-supplements, medical devices, and medical formulations in China. The Company also has its research and development force for certain products it manufactures through OEM arrangement and distributes. The Company distributes its products to wholesale distributors including more than 300 hospitals and 500 medicine companies that sell to over 2,000 drug stores in 28 provinces throughout China. The Company actively develops a number of proprietary products for a variety of uses, including oncology, high blood pressure and the removal of toxins from food and animal feeds.
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