Dec 08, 2010

Sumitomo Corp announces intentions to acquire a 29% strategic stake in C&O Pharmaceutical, a CMIA Capital Partners portfolio company

On December 1, 2010, Sumitomo Corporation ("Sumitomo") announced that it has entered into a sale and purchase agreement with Leo Star Development Limited, an investment holding company helmed by C & O Pharmaceutical Technology (Holdings) Limited ("C&O" or "the Company"), Executive Chairman Mr. Gao Bin, for a 29 per cent stake in C&O for $96.19 million (US$72.84 million) or $0.50 per share. This marks a full-fledged advance to the China Pharmaceutical market by Sumitomo.

Under the agreement, Sumitomo will act as an intermediary to bring drugs already sold in Japan, the US and Europe, to China which will be distributed by C&O through its nationwide network of more than 300,000 hospitals and pharmacies. Sumitomo will also utilize C&O's R&D capabilities to embark on pharmaceutical development on a contract basis. Sumitomo is also expected to provide C&O with highly competitive active pharmaceutical ingredients and to assist in the export of C&O branded products to South East Asia market. Through these initiatives, Sumitomo plans to double C&O's turnover to be 15 billion Yen within the 5-year range.

The acquisition is expected to be completed by the end of 2010. Post the acquisition, Sumitomo will become the second largest shareholder of C&O.

C&O has been a portfolio company of CMIA Capital Partners since 2007.