Mindray down on the acquisition of remainder of Chinese orthopedics company for $72.6M

Chinese medical device player Mindray Medical ($MR) was down 7% in early trading on the news that it would acquire the remaining stake of orthopedics player Wuhan Dragonbio Surgical Implant Co. Mindray first gained a controlling stake in Dragonbio for $35.5 million in 2012. Investors may be taking the deal as a sign that a June take-private offer is now off the table. The deal is slated to close this month.

Investors' lack of enthusiasm about the deal pushed Mindray close to its 52-week low share price. The company still has a respectable $2.9 billion market cap, but its share price has declined by roughly one-third in the past two years.

Private take-out offers for Mindray have long been rumored. Last month, the company officially said that it is considering a $30-per-share take-private offer. But after rising to above that share price at the time, now Mindray shares have sunk to below $25 apiece, indicating that investors have diminishing confidence that this take-private deal will get done at the disclosed share price.

In the most recent quarter, Mindray reported net revenues of $272.5 million, representing 2.9% growth year over year. The company has three divisions: patient monitoring and life support products, which had net revenues of $102.8 million; in vitro diagnostics ($75.1 million); and medical imaging systems ($66.7 million). Orthopedics, accessories and services contributed $27.8 million.

Like Mindray, Dragonbio is a Chinese domestic medical device maker. It specializes in trauma, spine, joint and other surgical products. Mindray will fund the deal with existing cash reserves; it had a whopping $1.1 billion in cash at March 31.

"Since we acquired a majority stake of Dragonbio in 2012, the integration has been well on track," said Mindray co-CEO and CSO Minghe Cheng in a statement. "We are optimistic about the prospects of the orthopedic consumable market in China and have therefore decided to make Dragonbio our wholly owned subsidiary."

- here is the release

Suggested Articles

Millions of tests are urgently needed as the virus keeps communities across the country in lockdown and hospitals are overwhelmed with patients.

The FDA granted its first emergency authorization for a rapid antibody blood test for COVID-19 developed by Cellex.

The ultimate goal is to move as many patients as possible out of the clinic that don’t need immediate, critical care.