Private placement of 6% in WuXi's SynTheAll unit raises $80M to fund manufacturing boost

A pending management buyout has not slowed the pace of WuXi PharmaTech's ($WX) far-flung dealmaking as the China-based and U.S.-listed company said its SynTheAll Pharma unit raised $80 million in a private placement aimed at expanding manufacturing capacity, according to a press release.

WuXi CEO Ge Li

WuXi, which has operations across genomics sequencing, contract research and manufacturing as well as medical devices, is now the focus of a management-led buyout. CEO Ge Li, who co-founded the company, and major shareholder Ally Bridge Group Capital Partners, are offering $46 per share, which values the company at $3 billion. A special committee of board members is now evaluating the proposed deal.

SynTheAll Pharma was listed on China's over-the-counter exchange, known as the Third Board, in April 2015 with the manufacturer of small-molecules valued at around $1.3 billion based on the placement amount raised. WuXi retains 89.1% of the company, according to the press release.

Earlier this month, China put the brakes on initial public share sales in Shanghai and Shenzhen following volatile trade that saw the Shanghai Composite index plunge as much as 30% and the government step in through regulators and state funds to support the markets.

But Chinese companies remain active in dealmaking outside of the main exchanges--including deals in the past two months that saw a consortium of Chinese companies buy San Diego-based biotech Ambrx, which abandoned a U.S. IPO last year, and one Chinese company that left the U.S. market two years ago, 3SBio, come back via Hong Kong this year in an IPO that raised $710 million.

SynTheAll Pharma, according to the press release, provides process chemistry services and manufactures small-molecule advanced intermediates and APIs for preclinical and clinical trials. The company is now building new facilities in Changzhou to substantially increase capacity.

The money raised will be used to fund the new plan and related investments, the press release said.

- here's the release