[Caihua News] Baikang Medical-B (02170.HK) announced that on November 3, 2021, Xingbo, the seller and the company entered into an investment agreement under which the company agreed to acquire and the seller agreed to sell a 51% stake in Xingbo for a consideration of 85 million yuan. Upon completion of the acquisition, Xingbo will become a non-wholly owned subsidiary of the company. The consideration will be paid in cash and will be paid by the Group using internal resources from the net proceeds from the global offering.
Xingbo Biological Co., Ltd., Zhejiang Xingbo Biotechnology Co., Ltd., is a company focusing on the R & D, production, sales and technical services of assisted reproductive technology diagnosis and treatment products.
In view of Xingbo's strategic layout, the strong product mix of China's reproductive genetics medical device market, its strong R & D and marketing capabilities, and its rich experience and insight into China's broader reproductive genetics market and the overall medical device industry, the company is optimistic about the future and development of Xingbo Biology. The company believes that Xingbo's business can provide synergy for the group's business, and Xingbo's products and products under research can further enrich the company's product supply in the undeveloped market in China.
It was also disclosed that the company's H shares were successfully listed on the main board of the Stock Exchange on February 8, 2021 and received a net proceeds of HK $1.899 billion for the listing-related global offering. The Group originally planned to spend about 10% of the net proceeds on improving the company's R & D capability and technology. After consideration, in order to seize the acquisition opportunity of the acquisition, the Group intends to expand the scope of use of the net proceeds in order to improve the company's R & D capability and technology.
On November 3, 2021, the board of directors approved the acquisition and changed the use of the above net proceeds. The change in the use of the net proceeds from the global offering can only be confirmed after the company's shareholders pass an ordinary resolution at the company's interim general meeting.
The Board is of the view that despite the above changes in the use of the unspent net proceeds, the development direction of the Group is still in line with the disclosure of the prospectus. The Board is not aware of the significant change in the nature of the Group's business. The Board considers that the use of the net proceeds from the above changes is fair and reasonable as it will help the Group to deploy its financial resources more effectively to enhance the Group's R & D capabilities and channels, it will not have any material adverse impact on the existing business and operations of the Group and is therefore in the best interests of the Group and shareholders as a whole.