Alibaba Deepens Health Care Interest With Stake in Private Clinic Operator
Meinian Onehealth Healthcare Holdings Co. Ltd. has sold around one-sixth of its total shares to investors including two affiliates of Alibaba Group Holding Ltd. for just over $1 billion, the clinic operator announced Sunday.
The sale of 16.16% of Meinian’s total shares for 7.3 billion yuan ($1.03 billion) in an equity transfer was completed Friday, with the price set at 12.01 yuan per share, the announcement said. That was 10% lower than the closing price on the previous trading day, which is the maximum discount allowed under the Shenzhen Stock Exchange’s rules.
Meinian’s stock closed down 1.55% at 13.34 yuan Thursday, but opened up 9.99% at 14.97 yuan on Monday and closed at the same level.
Alibaba (China) Network Technology Co. Ltd. and another Alibaba affiliate paid 4.86 billion yuan in total for a combined stake of 10.82%, the statement said. Their combined stake would make them the company’s second-largest shareholders.
The other buyer, investment firm Shanghai Qijun Investment Center LP, purchased 5.34% of Meinian’s total shares. Alibaba (China) Network Technology is a noncontrolling shareholder in Shanghai Qijun with a 36.36% stake.
Alibaba Group said in a statement that its affiliates will be strategic shareholders in Meinian and partner with it in a digital transformation.
Founded in 2004, Meinian is one of China’s two largest private clinic operators and has specialized in medical-checks since acquiring the country’s biggest medical-check chain CiMing Health Checkup Management Group Co. Ltd. in 2017.
Its major rival, iKang Healthcare Group Inc. completed a privatization from the Nasdaq early this year, after a buyout by an investor consortium that also included an Alibaba subsidiary, Taobao China Holding Ltd.
Many see huge potential in the area as Beijing slowly allows more private money into the health care sector, which was previously mostly off limits to such investment.
As of June 30 this year, Meinian is operating about 684 medical checkup clinics in 311 cities across the country, and has a market valuation of over 50 billion yuan, according to its financial report. More than 10 million health checks were carried out at its clinics in the first six months of this year, with each check bringing in around 499 yuan of revenue on average.
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