Morgan Stanley Private Equity Asia (MSPEA) has agreed to partner with Hong Kong-listed Sihuan Pharmaceutical Holdings Group Ltd and Sihuan’s chairman Dr. Che Fengsheng to acquire a 69.21% stake in Nanjing Jiangbei People’s Hospital (JB Hospital) for RMB409.3 million (US$66 million), according to a security filing.

MSPEA Health, a special purpose vehicle set up by MSPEA, will contribute RMB156.1 million, representing 38.14% of the total amount.



Sun Moral, a wholly-owned subsidiary of Sihuan, will hold 23.71% of the stake by investing RMB97.1 million. Euromax, wholly-owned by Sihuan’s chairman Dr. Che, will invest the remaining amount.

Sihuan is a portfolio company of MSPEA, which acquired a 10% stake during the company’s US$458 million take-private deal from the Singapore Exchange in 2009.

MSPEA reduced its holdings when Sihuan relisted in a US$741 million Hong Kong IPO a year later, and has been selling down its shares gradually.

The three parties can also potentially increase their ownership of JB Hospital to approximately 82% by acquiring secondary shares from employees, says the statement.

Sihuan, MSPEA plans to improve the hospital’s operations and help it grow.

Nanjing city, Jiangsu province-based JB Hospital has registered bed count of 506, with 18 wards, 34 clinical and medical departments. It generated RMB331 million in revenues in 2013.