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China Cord Blood (CO) Unit To Buy Cordlife's Interest In Shandong Province Qilu Stem Cells

 December 06, 2012 11:18 AM

(By Balaseshan) China Cord Blood Corp. (NYSE: CO), which provides umbilical cord blood stem cells storage, said its unit has agreed to buy Cordlife's interest in Shandong Province Qilu Stem Cells Engineering Co. Ltd.

Favorable Fort Ltd. has entered into a definitive agreement with Cordlife Services (S) Pte. Ltd., a subsidiary of the company's strategic affiliate Cordlife Ltd., a cord blood and tissue banking service provider listed on the Australian Securities Exchange.

Favorable Fort will acquire Cordlife's interest in the joint venture, which has a minority interest in Shandong Province Qilu Stem Cells Engineering Co. Ltd. (Qilu), the operator of Shandong Cord Blood Bank, for a cash consideration of $8.65 million.

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Upon completion of the transaction, China Cord Blood's effective equity interest in Qilu will increase from about 19.9% to 24.0%. The completion of this transaction will be subject to approval by Cordlife's shareholders.

The incremental increase in equity ownership of Qilu is consistent with the company's strategy to expand its China presence, and at the same time, streamlines the organizational structure of the Company.

The company engaged Roth Capital Partners to provide, and Roth Capital Partners has delivered, an opinion to the company's Board of Directors as to the fairness, from a financial point of view, of the transaction.

China Cord Blood is a Hong Kong-based company that provides umbilical cord blood storage services for parents to save cord blood stem cells on behalf of their children. It provides exclusive cord blood storage services in the Beijing Municipality, the Guangdong Province and the Zhejiang Province.

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CO is trading up 0.38% at $2.67 on Thursday. The stock has been trading between $2.03 and $3.38 for the past 52 weeks.



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