Chindex, Fosun Pharma form joint venture on manufacturing, distributing medical devices in China

April 02, 2017

Chen Qiyu, Chairman of Fosun Pharma said, "Fosun Pharma is pleased to be partnering with Chindex, including establishing Chindex Medical Ltd. Chindex is a well known name in the medical device markets in China. We look forward to leveraging both companies' strengths to consummate and grow the venture in the future. In addition, we are happy to be an important shareholder of Chindex as we believe both the Chindex and the United Family Healthcare brands have great potential as the demand for premium healthcare services accelerates along with China's growing economy.  We believe that United Family Healthcare is the leading private premium healthcare services brand in the country today."

Financial Impact of the Transaction

Income statement: Upon formation of the Joint Venture expected later this year, Chindex expects to no longer consolidate the results of its Medical Products division.  Using the equity method, the Company would recognize the proportional contribution from the Joint Venture. The use of the equity method would also reduce the volatility of the Company's revenue and income from operations of the division, which was experienced due to the timing of shipments of medical products.

Balance sheet: Upon closing, the stock sale is expected to raise an aggregate of approximately $30.0 million.  Chindex believes the increased capital will allow more rapid expansion of the United Family Healthcare network. Chindex currently has expansion projects underway in Beijing, Shanghai, Guangzhou and Tianjin. Additional development projects are under negotiation in Chengdu, Hangzhou, Qingdao and Dalian.

SOURCE Chindex International, Inc.