Dive Brief:
- Shanghai Jiuchuan Investment Group has agreed to buy SHL Telemedicine for $120 million.
- SHL, based in Tel Aviv and operating mostly in Israel and Germany, said the sale will enable it to expand into other markets, especially China.
- The company's devices are places in subscribers' offices or homes and transmit cardiology or other medical data to SHL's telemedicine center, where it is evaluated by their healthcare professionals.
- The deal is being planned as a merger where SNL shares would be delisted and the company would be made into a wholly owned division of Shanghai Jiuchuan. It still has to gain shareholder approval and is expected to be completed by October.
Dive Insight:
According to the Israeli newspaper Haaretz, this deal is amongst several in recent months by Chinese companies. Just last month, XIO, a Chinese investment group, agreed to buy Lumenis, a medical device company, for $510 million and Chinese conglomerate Fosun International agreed to buy 52% of Phoenix, an insurer, for about $470 million.
SHL said the transaction "is the next logical step in SHL's global expansion strategy and will enable it, with the support of Shanghai Jiuchuan, to expand into the growing Chinese market."
SHL Telemedicine was founded in 1987 and went public in 2000 in a 127-million-franc IPO, indicating it's being sold at a 10% discount to its IPO price. The lower value reflects its inability to replicate its success in the Israeli market in other markets, according to an article in Haaretz.
Philips broke off a joint venture it had with SHL in 2007. But SHL said that "following its careful evaluation of the strategic alternatives, SHL is anticipated to become a truly worldwide telemedicine leader with this transaction."