CRO giant WuXi is going private in a $3.3B deal

Wuxi PharmaTech CEO Ge Li

WuXi PharmaTech ($WX), China's largest CRO, agreed to a $3.3 billion buyout deal that would take it off of Wall Street and into the hands of some private investors.

Pending shareholder approval, the Shanghai-headquartered company will cease its U.S. listing in the fourth quarter of this year, selling itself to a newly formed parent company in an all-cash deal that trades $46 for each of WuXi's American-traded securities. The total represents a 16.5% premium over WuXi's closing price before the potential deal came to light.

WuXi CEO Ge Li first pitched the idea in April, teaming up with Chinese-American investor Ally Bridge Group and penning a note to the board urging a deal. Li and Ally now join the ranks of WuXi's buyers, alongside Boyu Capital, Temasek Life Sciences, Hillhouse Capital, Ping An Insurance and a group of the company's executives.

The buyers have disclosed little in the way of rationale for taking WuXi private, and Li has said only that it "provides a very attractive opportunity to the company's shareholders."

Li, a chemist by training, co-founded the company in 2000, hiring up thousands of chemists and buying out its rivals in hopes of cornering the market on outsourced drug development in its native country. WuXi went public in 2007 and has acquired more than a dozen companies ever since, growing to now employ more than 9,000 people and expanding its services into biologics R&D and contract manufacturing.

Li's long-stated goal is for WuXi to evolve beyond the traditional CRO model and "build an open-access capability and technology platform that enables anyone and any company discover and develop therapeutic products to benefit patients." So far that has meant investing heavily in genomics and emerging technologies like cell therapy, all the while poaching veterans from AstraZeneca ($AZN), Merck ($MRK), Medtronic ($MDT) and Eli Lilly ($LLY) to steer its future.

- read the statement

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