Genetron Holdings Limited (“
Genetron Health” or
the “
Company”, NASDAQ: GTH), a leading precision
oncology platform company in China that specializes in offering
molecular profiling tests, early cancer screening products and
companion diagnostics development, announced today that it has
entered into a definitive Agreement and Plan of Merger (the
“
Merger Agreement”) with New Genetron Holding
Limited (“
Parent”) and Genetron New Co Limited
(“
Merger Sub”), a wholly-owned subsidiary of
Parent. Pursuant to the Merger Agreement and subject to the terms
and conditions thereof, Merger Sub will merge with and into the
Company, with the Company continuing as the surviving entity and
becoming a wholly-owned subsidiary of Parent (the
“
Merger”), in a transaction implying an equity
value of the Company of approximately US$126.0 million.
Pursuant to the terms of the Merger Agreement, at the effective
time of the Merger (the “Effective Time”), each
ordinary share, par value US$0.00002 per share, of the Company
(each, a “Share”) issued, outstanding and not
represented by American depositary share of the Company (each, an
“ADS,” representing five1 Shares) immediately
prior to the Effective Time, other than the Excluded Shares and the
Dissenting Shares (each as defined in the Merger Agreement), will
be cancelled and cease to exist, in exchange for the right to
receive US$0.272 in cash per Share without interest (the
“Per Share Merger Consideration”), and each ADS,
issued and outstanding immediately prior to the Effective Time,
other than ADSs representing the Excluded Shares, together with
each Share represented by such ADS, will be cancelled and cease to
exist, in exchange for the right to receive US$1.36 in cash per ADS
(or US$4.08 in cash per ADS after the ADS Ratio Change) without
interest (less applicable fees, charges and expenses payable by ADS
holders, and such consideration, together with the Per Share Merger
Consideration, the “Merger Consideration”).
The Merger Consideration represents a premium of approximately
15% to the closing price of the Company’s ADSs on August 19, 2022,
the last trading day prior to the Company’s announcement of its
receipt of the “going-private” proposal, and a premium of
approximately 21% to the average closing price of the Company’s
ADSs during the last 30 trading days prior to its receipt of the
“going-private” proposal. The Merger Consideration represents a
premium of approximately 42% to the closing price of the Company’s
ADSs on October 10, 2023, the last trading day prior to this press
release.
Immediately following the consummation of the Merger, Parent
will be beneficially owned by (i) Mr. Sizhen Wang, co-founder,
chairman of the board of directors (the “Board”)
and chief executive officer of the Company (“Mr.
Wang”), (ii) CICC Healthcare Investment Fund, L.P.
(“CICC Healthcare”), (iii) Tianjin Kangyue
Business Management Partnership (Limited Partnership) (together
with CICC Healthcare, “CICC”), (iv) Surrich
International Company Limited, an investment entity wholly-owned by
Wuxi Guolian Development (Group) Co., Ltd. (“Wuxi
Guolian”), (v) Wealth Strategy Holding Limited, (vi) CCB
(Beijing) Investment Fund Management Co., Ltd., and (vii) Wuxi
Huihongyingkang Investment Partnership (Limited Partnership) (the
foregoing (i) through (vii), collectively, the
“Consortium”), and/or (viii) certain affiliates of
the members of the Consortium, and (ix) other Rollover Shareholders
(as defined below).
Concurrently with the execution of the Merger Agreement, Mr.
Wang, CICC, and certain other shareholders of the Company (all the
foregoing persons, collectively, the “Rollover
Shareholders”) entered into a rollover and support
agreement with Parent, pursuant to which the Rollover Shareholders
have agreed to vote all the Shares beneficially owned by them in
favor of the authorization and approval of the Merger Agreement and
to have certain Shares of the Rollover Shareholders cancelled at
the Effective Time for no cash consideration from Company in
exchange for certain equity interests of Parent.
The Consortium intends to fund the Merger through a combination
of cash contributions from certain members of the Consortium
pursuant to their respective equity commitment letters and rollover
equity contributions from the Rollover Shareholders.
The Board, acting upon the unanimous recommendation of a
committee of independent and disinterested directors established by
the Board (the “Special Committee”), approved the
Merger Agreement and the Merger and resolved to recommend the
Company’s shareholders vote to authorize and approve the Merger
Agreement and the Merger. The Special Committee negotiated the
terms of the Merger Agreement with the assistance of its financial
and legal advisors.
The Merger, which is currently expected to close during the
first quarter of 2024, is subject to customary closing conditions,
including, among others, (i) that the Merger Agreement shall be
authorized and approved by an affirmative vote of shareholders
representing at least two-thirds of the Shares present and voting
in person or by proxy at an extraordinary general meeting of the
Company’s shareholders, (ii) that the aggregate amount of
Dissenting Shares shall be less than 15% of the total outstanding
Shares immediately prior to the Effective Time, and (iii) certain
regulatory approvals, including the ODI Approval (as defined in the
Merger Agreement) for certain Consortium members in China. As of
the date of this press release, members of the Consortium and the
other Rollover Shareholders beneficially own Shares representing
approximately 59.7% of the total Shares issued and outstanding as
of March 31, 2023. If completed, the Merger will result in the
Company becoming a privately-held company and its ADSs will no
longer be listed on the Nasdaq Global Market.
Kroll, LLC (operating through its Duff & Phelps Opinions
Practice) is serving as the financial advisor to the Special
Committee, and Davis Polk & Wardwell LLP is serving as U.S.
legal counsel to the Special Committee and the Company.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S.
legal counsel to the Consortium, and King & Wood Mallesons is
serving as PRC legal counsel to the Consortium. Latham &
Watkins LLP is serving as U.S. legal counsel to CICC. Gunderson
Dettmer Stough Villeneuve Franklin & Hachigian, LLP is serving
as U.S. legal counsel to Wuxi Guolian, and Jincheng Tongda &
Neal is serving as PRC legal counsel to Wuxi Guolian. Llinks Law
Offices is serving as PRC legal counsel to Wuxi Huihongyingkang
Investment Partnership (Limited Partnership).
Certain legal matters with respect to the Cayman Islands law are
advised by Walkers (Hong Kong).
Additional Information About the Merger
The Company will furnish to the U.S. Securities and Exchange
Commission (the “SEC”) a current report on Form
6-K regarding the Merger, which will include as an exhibit thereto
the Merger Agreement. All parties desiring details regarding the
transactions contemplated by the Merger Agreement are urged to
review these documents, which will be available at the SEC’s
website (http://www.sec.gov).
In connection with the Merger, the Company will prepare and mail
to its shareholders a proxy statement that will include a copy of
the Merger Agreement. In addition, in connection with the Merger,
the Company and certain participants in the Merger will prepare and
mail to the Company’s shareholders a Schedule 13E-3 Transaction
Statement that will include the Company’s proxy statement (the
“Schedule 13E-3”). These documents will be filed
with or furnished to the SEC. SHAREHOLDERS AND OTHER INVESTORS OF
THE COMPANY ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE
MATERIALS AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC
WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY, THE MERGER, AND RELATED MATTERS. In
addition to receiving the proxy statement and the Schedule 13E-3 by
mail, shareholders also will be able to obtain these documents, as
well as other filings containing information about the Company, the
Merger, and related matters, without charge from the SEC’s website
(http://www.sec.gov).
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be “participants” in the solicitation of proxies from its
shareholders with respect to the Merger and related matters.
Information regarding the persons or entities who may be considered
“participants” in the solicitation of proxies will be set forth in
the proxy statement and the Schedule 13E-3 relating to the Merger
and related matters, when it is filed with or furnished to the SEC.
Additional information regarding the interests of such potential
participants will be included in the proxy statement and the
Schedule 13E-3 and the other relevant documents filed with or
furnished to the SEC when they become available.
This announcement is neither a solicitation of proxy, an offer
to purchase nor a solicitation of an offer to sell any securities,
and it is not a substitute for any proxy statement or other
materials that may be filed with or furnished to the SEC should the
proposed merger proceed.
About Genetron Holdings
Limited
Genetron Holdings Limited (“Genetron
Health” or the “Company”) (Nasdaq: GTH)
is a leading precision oncology platform company in China that
specializes in cancer molecular profiling and harnesses advanced
technologies in molecular biology and data science to transform
cancer treatment. The Company has developed a comprehensive
oncology portfolio that covers the entire spectrum of cancer
management, addressing needs and challenges from early screening,
diagnosis and treatment recommendations, as well as continuous
disease monitoring and care. Genetron Health also partners with
global biopharmaceutical companies and offers customized services
and products. For more information, please visit
ir.genetronhealth.com.
Safe Harbor Statement
This press release contains forward-looking
statements made under the “safe harbor” provisions of Section 21E
of the Securities Exchange Act of 1934, as amended, and the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“will,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates” and similar statements. Genetron Health may
also make written or oral forward-looking statements in its
periodic reports to the SEC, in its annual report to shareholders,
in press releases and other written materials and in oral
statements made by its officers, directors or employees to third
parties. Statements that are not historical facts, including
statements about Genetron Health’s beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: uncertainties as to how the Company’s shareholders will
vote at the meeting of shareholders; the possibility that competing
offers will be made; the possibility that financing may not be
available; the possibility that various closing conditions for the
transaction may not be satisfied or waived; the laws and
regulations relating to Genetron Health’s industry; the general
economic and business conditions; and assumptions underlying or
related to any of the foregoing. Further information regarding
these and other risks is included in Genetron Health’s filings with
the SEC. All information provided in this announcement and in the
attachments is as of the date of this press release, and Genetron
Health does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Investor Relations ContactEmail:
ir@genetronhealth.com
____________________________________________________1 The
Company announced today that it plans to implement a change of the
ratio of its ADSs to Shares from one (1) ADS representing five (5)
Shares to one (1) ADS representing fifteen (15) Shares on or about
October 26, 2023 (such change, the “ADS Ratio
Change”).
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