Private equity giant Warburg Pincus is partially exiting Hong Kong-listed assisted-reproduction company Jinxin Fertility by selling approximately 5.39 per cent of its stake for about HKD1.5 billion ($194 million), according to a filing.
In a disclosure to the Hong Kong Exchange, Jinxin Fertility said Warburg Pincus, through Amethyst Gem Holdings, and two other substantial shareholders – Jinxin Fertility Investment Group and Jinxin Global Fertility Company – have agreed to sell a combined 244.9 million shares, or 10.08 per cent of the company’s total, for HKD11.18 each.
Warburg Pincus is selling 134.7 million shares, trimming its stake from 18.39 per cent to 12.85 per cent. The PE firm became Jinxin Fertility’s second-largest shareholder in October 2018, about five months before the Sichuan-based IVF services provider listed in Hong Kong.
Jinxin said Warburg and the two other shareholders will remain as substantial shareholders of the company once the disposal is completed by July 10.
Jinxin Fertility claims to be the leading assisted reproductive services (ARS) provider in China. In 2017, its assisted reproductive medical facilities in China performed 18,018 IVF treatment cycles, according to the F&S Report prepared by Frost & Sullivan.
The report added that the ARS market in China experienced rapid growth from 11.5 billion yuan ($1.7 billion) in 2013 to 22.1 billion yuan ($3.21 billion) in 2017. The market is expected to grow to 52.7 billion yuan ($7.8 billion) by 2023.
“China’s assisted reproductive market is expected to maintain strong growth as demand for quality assisted reproduction services continues to rise,” Jinxin said previously.
Jinxin raised $390 million in global offering and IPO on the Main Board of the Hong Kong Stock Exchange.
Warburg Pincus earlier said assisted reproduction has become one of the fastest-growing markets among the healthcare industry in China, with potential market size of more than 100 billion yuan ($15 billion).
The PE firm made the final close for its China-Southeast Asia-focused private equity fund – Warburg Pincus China-SEA II – in June 2019 after securing commitments exceeding a $4.25-billion hard cap.
The vehicle, which is Warburg Pincus’ first fund with a dedicated focus on Southeast Asia, was launched in January last year with a target fund size of $3.5 billion. Warburg Pincus China-SEA II invests in Chinese and Southeast Asian portfolio companies alongside the firm’s global PE fund, Warburg Pincus Global Growth Fund LP (WPGG), which closed in late 2018 at $14.8 billion.