According to the proposal letter, the
The Board intends to form a special committee consisting of independent directors to consider this proposal.
The Board cautions the Company's shareholders and others considering trading in its securities that the Board just received the non-binding proposal letter from the
Through iKang's integrated service platform and established nationwide network of medical centers and third-party service provider facilities, the Company provides comprehensive and high quality preventive healthcare solutions, including a wide range of medical examinations services and value-added services including disease screening and other services. iKang's customers are primarily corporate customers who contract the Company to provide medical examination services to their employees and clients, and pay for these services at pre-negotiated prices. iKang also directly markets its services to individual customers. In the fiscal year ended March 31, 2015, the Company served a total of 3.6 million customer visits under both corporate and individual programs.
As of August 24, 2015, iKang's nationwide network consisted of 77(1) self-owned medical centers covering 22 of the most affluent cities in
(1) Among the 77 self-owned medical centers, three medical centers are currently operated primarily by the minority shareholders of these medical centers or their parent company.
This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. For additional information on important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the
The Board of Directors
We believe that our proposed price provides an attractive opportunity to the Company's shareholders. This price represents a premium of 10.8% to the closing price of the Company's ADSs on
The terms and conditions upon which we are prepared to pursue the Acquisition are set forth below. We are confident in our ability to consummate an Acquisition outlined in this letter.
Buyer Group. Members of the Buyer Grouphave entered into a consortium agreement dated as of the date hereof, pursuant to which members of the Buyer Groupagree to, among other things, cooperate in connection with implementing the Acquisition, and work with each other on an exclusive basis in pursuing the Acquisition.
Purchase Price. Our proposed consideration payable for the Shares acquired in the Acquisition is
US$17.80per ADS, or US$35.60per Share (the "Offer Price"), in cash.
Financing. We intend to finance the Acquisition with a combination of debt and/or equity capital. Equity financing will be provided by the
Buyer Groupin the form of cash and rollover equity in the Company, and from any additional equity investor who may be admitted to the Buyer Group. Debt financing is expected to be provided by loans from third party financial institutions. We are confident that we can timely secure adequate financing to consummate the Acquisition.
Due Diligence. Parties providing financing will require a timely opportunity to conduct customary due diligence on the Company. We would like to ask the Board of the Company to accommodate such due diligence request and approve the provision of confidential information relating to the Company and its business to possible sources of equity and debt financing subject to a customary form of confidentiality agreement.
Definitive Agreement. We are prepared to negotiate and finalize definitive agreements (the "Definitive Agreements") expeditiously. This proposal is subject to execution of the Definitive Agreements. These documents will include provisions typical for transaction of this type.
Buyer Groupwill, as required by law, promptly file a Schedule 13D to disclose this proposal. We are sure you will agree with us that it is in all of our interests to ensure that our discussions relating to the Acquisition proceed in a confidential manner, unless otherwise required by law, until we have executed the Definitive Agreements or terminated our discussions.
Process. We believe that the Acquisition will provide value to the Company's shareholders. We recognize of course that the Board will evaluate the proposed Acquisition independently before it can make its determination whether to endorse it. In considering the proposed Acquisition, you should be aware that we are interested only in acquiring the outstanding Shares that the
Buyer Groupdoes not already own, and that the Buyer Groupdoes not intend to sell their stake in the Company to a third party.
No Binding Commitment. This letter constitutes only a preliminary indication of our interest, and does not constitute any binding offer, agreement or commitment with respect to an Acquisition. Such a commitment will result only from the execution of Definitive Agreements, and then will be on the terms provided in such documentation.
FountainVest Partnersis a leading China-focused private equity firm. FountainVest's investments are long term oriented, and targets high growth industry leaders in Chinain the healthcare, consumer, media and technology, and other sectors. FountainVest works closely with management teams to create value in the areas of strategy, operations, finance, industry consolidation and governance.