Chinese retailer Suning commits $50m in Yunfeng-led vehicle for iKang privatisation

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Chinese retailer Suning has committed $50 million in a co-investing vehicle managed by Alibaba’s Yunfeng Capital to facilitate the privatisation of Nasdaq-listed iKang Healthcare.

Suning said, in a statement, Yunfeng IK Co-invest fund targeted domestic and foreign institutions, enterprises and high net worth individuals. The vehicle has a hard cap of $122 million and is still raising more capital.

Separately, the retailer also announced that it invested $210 million in the $2.5-billion Yunfeng Fund III.

Suning said, the investment will help strengthen the company’s industrial investment capabilities as well as accelerate smart retail development, creating business synergies which will enrich its ecosystem.

iKang has planned its privatisation since 2016. In March 2018, iKang announced a $1.4-billion going private transaction led by Yunfeng Capital and Alibaba. However, the proposal has been extended several times since then.

This is not the first time Alibaba and Suning cooperated in an investment deal. The duo hold stakes in each other, while Yunfeng Capital also invested in Suning Financial Services and Suning Sports.

Yunfeng Capital makes private equity investments across various sectors, including technology, healthcare, media and entertainment, financial services, logistics and consumer. The Shanghai-headquartered firm manages both USD-dominated and Chinese yuan-dominated funds.

iKang Healthcare is one of China’s largest private preventive healthcare services providers, with a nationwide integrated network of multi-brand self-owned medical centers and third-party facilities.

iKang’s customer base primarily comprises corporate clients, who contract with iKang to deliver medical examination services to their employees and clients.

As of December 2018, iKang had 119 self-owned operating medical centers, covering 35 of China’s most affluent cities, as well as Hong Kong. The firm has also extended its coverage to over 200 cities by contracting with more than 400 third-party facilities.