HONG KONG (Reuters) - AGIC Capital, a $1 billion Asian-European private equity firm, agreed on Friday to buy Central European medical laser company Fotona from U.S. investment firm The Gores Group, targeting growth in China and other Asian countries.
AGIC, founded by veteran China dealmaker Henry Cai in 2015, did not disclose financial details of the deal, though a person with knowledge of the purchase pegged the value between $100 million and $250 million.
AGIC is betting its knowledge of China and other Asian countries will help Fotona, which makes lasers for medical, dental and aesthetic surgeries and treatments, deepen its expansion in the region. The company has grown 30-50 percent annually in China the past few years, outgrowing the market average of 20 percent, said Sam Sun, AGIC’s greater China head.
“The demand is really driven by a growing Chinese middle class and their desire to treat themselves better and have better care for their health and body,” Sun told Reuters in an interview on Friday.
Gores bought Fotona for a reported 18 million euros ($25 million) in 2014, when Slovenia's government sold a series of state assets to revive the economy. reut.rs/2oXxJMy
AGIC's investment follows a similar move by Shanghai Fosun Pharmaceutical Group Co Ltd (600196.SS), which acquired Israel-based Alma Lasers Ltd, a maker of lasers used in cosmetic surgery, for $240 million in 2013. reut.rs/2osIVQi
The global market for medical lasers is excepted to surge to about $13 billion by 2022 from nearly $5 billion in 2015, according to research firm Stratistics Market Research Consulting. Over the forecast period, Asia Pacific will be the fastest growing market because of rising disposable income and increasing healthcare expenditure, particularly in China and India.
These medical acquisitions also come amid Beijing’s plan to overhaul the country’s underdeveloped healthcare sector and raise the global competitiveness of domestic industry. In the “Made in China 2015” blueprint, Beijing named high-end medical devices and biopharmaceutical as pillar sectors, among others.
The takeover of Fotona is AGIC’s third investment since its establishment by Cai.
Last year, it joined a Chinese consortium led by state-owned China National Chemical Corp (ChemChina) to buy German industrial machinery maker KraussMaffei for about $1 billion, then the largest outbound investment from China into Germany. It also snapped up a majority stake in Italian robotic firm Gimatic for about 100 million euros. reut.rs/1OhBu6h
Writing by Julie Zhu; Editing by Gopakumar Warrier