On August 26, 2018 at 10:00 a.m., the signing ceremony for the Capital Increase and Share Transfer Agreement between Zhuhai Kindly Medical Devices Co., Ltd. (“Zhuhai Kindly”), a wholly-owned subsidiary of Shanghai Kindly Enterprise Development Group Co., Ltd. (“Kindly”), and Guangxi Ouwen Medical Technology Group Co., Ltd. (“Guangxi Ouwen”) was held in the meeting room at Zhuhai Kindly. Mr. Zhang Xianmiao, the chairman of the Board of Kindly, Mr. Zhu Fangwen, the chairman of the Board of Guangxi Ouwen, and Mr. Wang Kai, the managing partner of Huaige Capital attended the ceremony. Mr. Zheng Chenghua, the general manager of Zhuhai Kindly, on behalf of Zhuhai Kindly, and Mr. Zhu Ouwen, on behalf of Guangxi Ouwen, signed the agreement, a process which was witnessed and congratulated by government officials of Jinwan District, Zhuhai and Yongning District, Nanning.
This transaction marks Kindly's first expansion effort through a large-size acquisition since it was listed three years ago and has the potential to accelerate its development of domestic market channels. In this way, Kindly's business model that integrates agency, delivery and supply chain third-party service will be further facilitated. The acquisition of Guangxi Ouwen, once completed, will improve Kindly’s network of channels in South China, increase its market share of medical puncture devices, and lay a sound foundation for subsequent development of new products through the gained synergies.
As an executive director and a vice-chairman of Guangxi Association for Medical Device Industry, and the chairman of the Division of Operating Enterprises under the Association, Guangxi Ouwen is among Guangxi's largest and most specialized service providers focusing on medical devices and has subsidiaries or offices in all of 12 prefectural cities under Guangxi. Its primary activities include providing all categories of medical devices needed for clinical practices and rendering SPD-based intra-hospital logistics services. Its SPD-based services considerably increase the concentration of medical consumables suppliers across hospitals of all levels. In addition to the ability to perform as an agent of large brands and the experience in resale of all categories of medical devices across all channels and all medical departments, Guangxi Ouwen can analyze the status and needs of medical institutions, and work out solutions that optimize the structure of products, enhance management efficiency and lower the operation costs of these institutions. These solutions are aligned with national policies and industrial trends on cost reduction.
Given the new trends in the distribution of medical devices, from December 2016 to June 2017, Huaige Capital and Guangxi Ouwen conducted a systematic research and analyzed possible capital cooperation opportunities. Their research and analysis drew a key conclusion that developing a complete body of services under which provision of full categories of medical devices to all medical departments is coupled with resale and delivery means the moat for Guangxi Ouwen. Later, from June 2017 to December 2012, working together with intermediaries including a law firm and an accounting firm, Huaige Capital reached all levels of Guangxi Ouwen. In doing so, It assisted Guangxi Ouwen in improving the compliance in the business course, legal affairs and financial affairs and in attracting strategic shareholders and partners from various areas in Guangxi via the combination of industry and capital. From January 2018 to September 2018, a final strategy investment into Guangxi Ouwen was completed in a phased process. With the help of Huaige Capital, an acquisition agreement between Guangxi Ouwen and Zhuhai Kindly was entered into, making the former a subsidiary of Kindly.
As further advancements are being made around the Greater Bay Area, the Belt and Road initiative and the Healthy China Plan, Kindly will with this acquisition being the pivot, leverage the location and policy advantages of Greater Bay Area, aiming for building an international business focusing on the healthcare sector. It will diversify its product lines, pro-actively expand overseas markets, speed up the investing and acquisition arrangements and further secure its leading position in this sector.
