Aibo Medical to Acquire 68.31% Stake in Demei Medical for RMB 683 Million, Entering Sports Medicine with 3x Premium and RMB 5 Billion Goodwill

(Source: Beijing Business Today)

Ophthalmic Instrument LeaderEyebright Medical(688050) Plans to Enter the Sports Medicine Field Through M&A. One month after disclosing its investment intention, the company announced a specific acquisition plan on February 26, proposing to acquire 68.31% of Delta Medical (Chongqing) Medical Technology Co., Ltd. ("Delta Medical") for 683 million yuan. The transaction price represents a premium of approximately three times over the net asset book value and is expected to generate about 500 million yuan in goodwill. In terms of funding, approximately 70% to 80% will come from bank M&A loans.

In response to market concerns about leveraged buyouts, a relevant person in charge of Eyebright Medical told Beijing Business Today on February 26 that the company currently has sufficient free cash on hand, good payment recovery, and national support policies for acquisition loans. The reasonable use of financial leverage will not create significant pressure.

In recent years, the sports medicine sector where Delta Medical is located has developed rapidly. Operating data shows that in 2025, Delta Medical achieved rapid growth in both revenue and net profit. Against the backdrop of a slowdown in Eyebright Medical's performance growth, whether this acquisition can inject new growth momentum into the company remains to be seen. Reporters will continue to follow up.

The loan ratio is expected to be 70%—80%.

Eyebright Medical's latest announcement shows that the company plans to use a merger loan and its own funds to acquire 68.31% of Delta Medical's equity at a transaction price of 683 million yuan. After paying the first installment of the equity transfer, the equity of Delta Medical involved in this transaction will complete all industrial and commercial change registrations. The company will enjoy all the rights and interests as a shareholder of the target company, and Delta Medical will become a controlling subsidiary of the company and be included in the company’s consolidated financial statements.

The announcement shows that Delta Medical is one of the leading enterprises in the field of sports medicine in China. Its core products cover all-suture anchors, interference screws, ultra-strong sutures, shaver blades, arthroscopic cannulas, 4K ultra-precise camera systems, and adjustable braces, etc. Among them, sports medicine implants are the main source of income, accounting for about 80% of the operating revenue.

As a leader in ophthalmic devices, Eyebright Medical's products currently cover three major areas: ophthalmic surgical treatment, myopia prevention and control, and vision care, providing one-stop solutions for ophthalmic surgery, refractive error correction, and optometric consumption. In the first half of 2025, the company's revenue from intraocular lenses, contact lenses, and orthokeratology lenses accounted for nearly 90% combined, at 43.86%, 30.06%, and 15.14%, respectively.

Eyebright Medical stated that, through the acquisition of a controlling stake in the target company, it aims to broaden its layout in the medical and health field. The company plans to achieve synergy with the target company in areas such as R&D, manufacturing, and sales channels, further enhancing corporate performance and shareholder returns.

Regarding the payment method for this transaction, Eyebright Medical mentioned that the consideration for this transaction will be paid in cash, which will result in a certain scale of net cash outflow for the company. Part of the transaction funds are intended to come from bank acquisition loans, with the loan ratio expected to be 70%-80% of the transaction price, which is expected to add a certain scale of interest-bearing debt at the consolidated financial statement level of the company. The company plans to use its own funds to repay the loan principal and interest in installments, which is expected to increase annual financial expenses to a certain extent, possibly impacting the company's profits.

Regarding this situation, a relevant person in charge of Eyebright Medical told Beijing Business Today that the company currently has relatively sufficient own funds and the repayment situation is also good. In theory, it has the ability to fully pay with its own funds. However, if fully paid, it may still have a certain impact on the company's daily operating capital arrangements. Considering that the state has introduced corresponding preferential and subsidy policies for acquisition loans, if used well, the financial leverage issue is not significant.

As of the end of the third quarter of 2025, Eyebright Medical had a cash balance of 680 million yuan and a debt-to-asset ratio of 22.93%.

Goodwill on the books will increase further.

It is worth mentioning that this transaction will bring about 500 million yuan of goodwill to Eyebright Medical.

According to the valuation conclusion, as of October 31, 2025, the book value of Delta Medical's net assets is 242 million yuan, the assessed value is 1.074 billion yuan, with an increase of 832 million yuan, representing a 343.29% increase. After negotiation by all parties involved in the transaction, the overall valuation of the target company acquired by the company this time is approximately 1 billion yuan.

Eyebright Medical stated that the price of the target assets in this transaction is based on the "Valuation Report," taking into comprehensive consideration factors such as the advanced nature of the target company's core technology, business development trends, historical operating performance, and future profit prospects. It fully references the valuation levels of comparable companies in the industry and incorporates the synergistic value of this transaction, as determined through negotiations among all parties involved.

"The final transaction price we determined is less than the assessed value, so we believe the pricing of this transaction is relatively reasonable," said a relevant person in charge of Eyebright Medical.

Due to a certain premium, it is expected that approximately 500 million yuan of goodwill will be formed upon the completion of this transaction. As of the end of the third quarter of 2025, Eyebright Medical's goodwill amounted to 191 million yuan. Following this acquisition, the company's goodwill will be further increased.

Eyebright Medical also warned of risks in the announcement, stating that if the target company fails to meet future business expectations due to changes in the market environment, national policy adjustments, or its own factors, the company may face the risk of goodwill impairment.

An Guangyong, an expert from the Credit Management Committee of the All-China Mergers and Acquisitions Association, stated that companies should regularly evaluate their assets, promptly conduct goodwill impairment tests, and ensure that financial statements reflect true value.

Regarding the issue of goodwill, a relevant person in charge of Eyebright Medical responded to Beijing Business Today reporters, stating that from the perspective of the company's current overall asset situation, the risk of goodwill is not high. In addition, goodwill impairment mainly depends on the future operating conditions of consolidated companies. In the future, the company will focus on improving operations and hopes not to convey related risks to the market.

Target: Revenue and Net Profit to Increase in 2025

For Eyebright Medical, which has experienced sluggish growth in performance, the company hopes to cultivate a new source of profit growth through this acquisition.

In terms of operating performance, Delta Medical has shown significant growth. Financial data shows that in 2024-2025, Delta Medical achieved operating revenues of 236 million yuan and 286 million yuan, respectively; the corresponding net profits (adjusted) were 9.2937 million yuan and 23.6023 million yuan, respectively.

Eyebright Medical stated that currently, Delta Medical's main business is developing well. This transaction will help the company increase operating income, improve gross profit margin, further optimize strategic layout, and consolidate its industry position. Delta Medical has obtained registration certificates for absorbable products such as absorbable suture anchors and absorbable interface screws. If it successfully qualifies for the next round of centralized procurement, it will provide positive support for operating performance.

To effectively safeguard the interests of the company and all shareholders, the founding shareholders of the target company have made clear performance commitments. During 2026–2028, at least one of the following performance targets must be achieved: first, the audited net profit for each year shall be no less than RMB 45 million, RMB 55 million, and RMB 65 million, respectively; second, the cumulative net profit shall be no less than RMB 165 million.

Eyebright Medical's financial data shows that in the first three quarters of 2025, Eyebright Medical achieved operating revenue of 1.144 billion yuan, a year-on-year increase of 6.43%; net profit attributable to shareholders was 290 million yuan, a year-on-year decrease of 8.64%. The decline in the company's net profit was mainly due to the decrease in revenue from intraocular lenses and contact lenses, as well as the increased promotion of the company’s own contact lens brand.

A representative of Eyebright Medical previously told the Beijing Business Today reporter that the company will continue to launch new products, accelerate the commercialization of innovative R&D pipelines, and improve the company's current revenue and product structure.

In the view of Deng Yong, Director of the Center for Health Law Research and Innovation Transformation at Beijing University of Chinese Medicine, the sports medicine sector has broad prospects. International giants currently account for over half of the domestic market share, leaving significant room for domestically produced alternatives. The ongoing nationwide fitness trend, aging population demands, and policy support will continue to drive the sector's growth. On the other hand, while the ophthalmology sector’s market size is steadily growing, its rate of expansion is slowing, with competition becoming increasingly fierce. This acquisition will enable the company to achieve synergy in R&D, production, and distribution channels, allowing it to quickly enter a high-growth sector. However, potential risks such as financial pressure from acquisition loans, integration challenges, difficulties in meeting performance commitments, and intensified competition in the sports medicine field must also be carefully monitored.

Reporter Ding Ning from the Beijing Business Journal