Neusoft introduces strategic investors for medical equipment and healthcare management businesses to create new momentum for future growth and accelerate its footprint in the global healthcare market
Neusoft Corporation (SSE: 600718), a leading IT solution & service provider in China, today announced that Neusoft intends to sign an agreement with Hony Capital, Goldman Sachs, Neusoft Holdings and other investors, to make investments on Neusoft’s two subsidiaries, Neusoft Medical Systems Co., Ltd. (“Neusoft Medical Systems”) and Neusoft Xikang Healthcare Technology Co., Ltd. (“Neusoft Xikang”). This announcement demonstrates that Neusoft will leverage the power of capital markets to further promote business model transformation, and build an open platform for its healthcare business together with strategic investors to accelerate the expansion in the dynamic global healthcare market. According to statistics, this round of financing for Neusoft Medical Systems and Neusoft Xikang will both set new records as the largest single financing respectively in China’s medical equipment industry and the Internet-based Medical and Healthcare Management sector, while the financing of Neusoft Xikang will be one of the largest single financing in the global Internet-based medical and healthcare management sector.
Hony Capital, Goldman Sachs, Neusoft Holdings, Canada Pension Plan Investment Board (CPPIB), Frontline BioVentures and other investors will invest 1.6 billion RMB to Neusoft Medical Systems, and also spend 1.13 billion RMB to purchase part of the equities in Neusoft Medical Systems from Neusoft Corporation. Whereas Hony Capital, Goldman Sachs, Neusoft Holdings and other investors will invest 170 million USD to Neusoft Xikang. Both Neusoft Medical Systems and Neusoft Xikang will set the share incentive scheme for the management teams and key employees. After the completion of these transactions, Neusoft Corporation will still be the largest shareholder of Neusoft Medical Systems and Neusoft Xikang, holding 33.35% of equities and 32.81% of equities respectively.
As a leading digital medical imaging equipments provider in China, Neusoft Medical Systems has successfully developed a series of medical imaging products, such as CT, MRI, X-Ray, Ultrasound and PET etc. Its products have been sold to over 90 countries and regions around the globe, serving nearly 8,000 medical institutions worldwide.
Neusoft Xikang is dedicated to becoming a global leading provider of cloud-based medical and healthcare management services. Based on O2O model, it builds an ecosystem for healthcare management & medical services by connecting medical institutions, doctors, families and individuals through technologies of big data, cloud computing, Internet of Things, and mobile Internet. At present, Neusoft Xikang has been promoting its “Healthy City” and “Healthy Community” initiatives in over 30 cities in China and has built a service network covering more than 5,000 urban and rural communities and benefiting over 20 million populations.
By introducing the strategic investors who have significant resources and experience in the healthcare industry, Neusoft will not only obtain financial support and resources for its healthcare business, but also define different business models for various businesses to generate new vitality for growth. This effort will be part of Neusoft’s new strategy to support its diversified businesses, including IT solutions, medical equipment, cloud-based medical and healthcare management businesses, to make the equity ownership structure and incentive system better match with the business model. At the same time, using the funds received from the equities transfer of Neusoft Medical Systems, Neusoft Corporation will invest more in big data, cloud technology and Internet solutions, to enhance its leading market position and guarantee future sustainable growth.
Dr. Liu Jiren, Chairman & CEO of Neusoft said: “This round of financing will release the energy Neusoft has accumulated in the past years in medical equipment and healthcare management, which will also be a strategic move for Neusoft to define different business models and incentives to maximize the value of its businesses. Neusoft Medical Systems and Neusoft Xikang will gain new momentum for growth by fully integrating the resources and experience of Hony Capital, Goldman Sachs and other strategic investors, and contribute more to the medical and healthcare industry. This restructuring will be a historical turning point in Neusoft’s development, and we are dedicated to become an active innovator of the industrial Internet application and a leader in cloud-based medical and healthcare services.”
Mr. John Zhao, Founder and CEO of Hony Capital said: “Healthcare industry is one of Hony Capital’s primary focuses as we have spent ten years on the investment of pharmaceuticals, medical equipments and medical services. China’s central government has advocated market force through adjustment of policies, and people care more and more about life quality nowadays. This makes the marriage between healthcare and mobile Internet very promising. Neusoft is very experienced in information technologies and healthcare industry. Dr. Liu Jiren, needless to say, is a creative and innovative entrepreneur. Hony believes in the market potential of Neusoft Medical Systems and Neusoft Xikang in medical equipment and healthcare management. We have invested in a few pharmaceutical companies and hospitals, and look forward to collaborating with Neusoft to further consolidate the industries. Together with Neusoft, Hony is committed to supporting China’s enterprises to become leading “product creators” and service providers in the global market.”
Ms. Stephanie Hui, Partner and Managing Director of Goldman Sachs said that the emerging information technologies are dramatically reshaping the global healthcare industry, especially in fast-growing emerging markets. The investment by Goldman Sachs on Neusoft Medical Systems and Neusoft Xikang is based on our expectation for the dynamic medical equipment and healthcare management market, and the future potential of China’s leading enterprises in this area. We will help to accelerate the development of Neusoft Medical Systems and Neusoft Xikang by leveraging our resources and experience in the international market.
Commenting on the investment in Neusoft Medical Systems, Ms. Suyi Kim, Managing Director of Private Equity Asia at CPPIB said, “We believe in the long-term growth potential of the Chinese healthcare industry given solid fundamental drivers. Neusoft Medical Systems has established itself as a leading domestic player in the sector with strong R&D capability, renowned brand, high quality product offerings and a high caliber management team.”
About Neusoft Corporation
As an IT solution and service provider, Neusoft provides innovative information technology – enabled solutions and services to meet the demands arising from social transformation, to shape new life styles for individuals and to create values for the society. Focusing on software technology, Neusoft provides industry solutions and product engineering solutions, related software products & platforms, and services. Established in China in 1991, Neusoft has 20,000 employees worldwide today, and it has 10 software R&D bases and a comprehensive marketing & service network covering more than 60 cities across China, as well as subsidiaries in the United States, Japan, Europe, the Middle East, the South America, etc. It was the first listed software company in China, also the country’s first one in the industry that had received both CMM Level 5 and CMMI V1.2 Level 5 certifications. For more information, please visit:www.neusoft.com.
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