Chemclin Diagnostics Completes Nearly RMB 2 Billion Private Equity Restructuring with China Renaissance as Exclusive Financial Advisor

According to VCBeat (WeChat ID: vcbeat), on August 1, 2018, Beijing Kemai Biotechnology Co., Ltd. (“Kemai Diagnostics,” “Kemai,” or the “Company”), a leading Chinese enterprise in chemiluminescence-based in vitro diagnostics, announced the completion of a private equity restructuring transaction with a total value of nearly RMB 2 billion. This transaction represents the largest private equity deal in China’s in vitro diagnostics sector in recent years.

This equity restructuring transaction was co-led by Huaxing Healthcare Industry Fund and Legend Capital, with participation from Ping An Ventures, CICC Kangrui Healthcare Industry Fund, Shanghai Free Trade Zone Fund, HighTide Capital, and Matrix Partners China. China Renaissance served as the exclusive financial advisor for this equity restructuring transaction.

Xie Yijing, Co-founder and Managing Director of China Renaissance, stated, “We are honored to have assisted the company in completing this private equity restructuring transaction, which marks a significant milestone in its corporate history. As a shining star in China’s chemiluminescence segment of the in vitro diagnostics (IVD) industry, Kemei Diagnostics will enter a new phase of development following this restructuring. We firmly believe that, through the concerted efforts of the management team and new shareholders, the company is poised to become the only platform enterprise in China mastering the next-generation chemiluminescence technology, and to emerge as a leader in global emerging markets.”

Mr. Li Lin, President and CEO of Kemei Diagnostics, stated, “Over the past decade, what I am most proud of is that, under the banner of ‘serving human health through technology,’ we have gradually assembled a team of high-caliber, international R&D professionals and business management talents who are driven by ideals.”

“For instance, more than 70% of our technical leadership team and corporate management members have overseas study experience or work backgrounds with multinational corporations abroad. Our team possesses extensive industry knowledge and practical experience, both internationally and domestically. Mr. Zhao Weiguo, our CTO, and I each have over 25 years of experience in this industry and have held senior positions at Fortune 500 companies. This is quite rare in China’s IVD industry today,” Li Lin remarked.

Li Lin pointed out that, from a technical perspective, the company not only boasts high standards but also possesses substantial accumulated expertise. For instance, led by Dr. Zhao Weiguo, the Chief Technology Officer, the team has developed the Light-Induced Chemiluminescence Assay (LiCA) platform technology, which holds numerous independent intellectual property rights. This platform integrates advanced technologies from various fields, including nanoparticles, homogeneous reactions, and laser excitation. On an international scale, it represents the fourth generation, i.e., the latest generation, of chemiluminescence technology, reaching an internationally advanced level.

“In my personal view, this technology represents the pinnacle of China’s chemiluminescence field to date. Over the past three years, infectious disease testing products on the LiCA platform have been the fastest-growing segment within China’s chemiluminescence industry. Through our own efforts, we have demonstrated in the market that it is not only technologically advanced but also holds strong commercial application prospects.”

Li Lin stated, “Our team’s vision is to leverage advanced international technologies to provide technically sophisticated, high-quality, yet relatively affordable medical diagnostic products to the Chinese people and those in developing countries worldwide. We aim to contribute to addressing the challenges of ‘high healthcare costs and limited access to medical care’ in our country. Furthermore, we strive to promote Chinese high-tech, high-performance medical diagnostic products on the global stage, thereby contributing to the nation’s technological revitalization and the Belt and Road Initiative.”

Li Lin stated, “It is worth noting that through this restructuring of our shareholding structure, we have introduced high-caliber, professional investment institutions, thereby effectively optimizing the composition of our shareholders and board of directors. This has enabled us to achieve a ‘triple excellence’ combination of superior technology, expert management experience, and quality capital—a rarity in the IVD industry. All of this has paved the way for the company’s accelerated growth in the future.”

Li Lin affirmed: “China Renaissance, as the exclusive financial advisor, made outstanding contributions to the success of this shareholder structure restructuring. Special thanks are hereby extended.”

Zhang Junjie, Founding Partner of Huaxing Medical Industry Fund, stated, “We are highly optimistic about China’s in vitro diagnostics industry, particularly companies like Kemei Diagnostics that possess the world’s most advanced core chemiluminescence technologies and exceptional team capabilities.”

Zhang Junjie stated, “The management team of Kemei, under the leadership of Mr. Li, is the most outstanding internationalized team in the industry and constitutes the core competitiveness of Kemei Diagnostics. Kemei does not merely pursue ‘bigness’ but places greater emphasis on ‘strength,’ striving to achieve the number one position in every core niche segment it focuses on. Meanwhile, Kemei has demonstrated its exceptional capability in industrial integration. At Kemei, we observe a ‘DNA double helix’ of self-innovation and external integration, continuously creating new opportunities for both the company and the industry.”

“We will continue to actively support Kemei in building an in vitro diagnostics platform enterprise with core competitiveness. Let us look forward to Kemei writing a new chapter,” said Zhang Junjie.

In Zhang Junjie’s view, the quality of Kemai Diagnostics’ core products is comparable to that of top-tier imported brands. Seizing the significant opportunity for domestic substitution of imports in China’s healthcare sector, the company provides cost-effective solutions to its customers and plans to expand into overseas markets under the impetus of the “Belt and Road” Initiative. He stated, “Precisely because Kemai’s genetic strategy aligns closely with the investment philosophy of Huaxing Medical Industry Fund, our team has invested nearly USD 100 million in Kemai again, following five years of successful collaboration.”

Zhou Hongbin, Managing Director at Legend Capital, stated, “Legend Capital made an investment decision of nearly USD 100 million in less than a month. We hold Kemei in high regard; it is a company with clear strategy and strong execution capabilities, consistently prioritizing technological innovation and product quality. Kemei’s fourth-generation chemiluminescence LiCA technology platform holds distinct advantages in the market, and its international team, led by CEO Mr. Li Lin and CTO Dr. Zhao Weiguo, is among the top-tier teams in the industry. These factors constitute the company’s fundamental competitiveness.”

Zhou Hongbin firmly believes: “Mr. Li Lin will lead Kemai to continuously surpass expectations, drive the advancement of medical diagnostic technology in China, and become a contributor to high-quality import substitution and the reduction of societal healthcare costs.”

Zhang Jiang, Partner at Ping An Ventures, stated: “The Kemei team possesses internationally leading immunoassay diagnostic platform technologies, combined with exceptional capabilities in innovative product development and marketing, making it a rare top-tier enterprise in China’s IVD sector. We are optimistic that, amid the wave of import substitution, Kemei will emerge as an industry leader and capitalize on substantial market opportunities.”

Guided by the philosophy of integrating insurance with prevention and treatment, as well as health management, Ping An is actively investing in and expanding its global diagnostic and testing ecosystem, which will support Kemei’s continuous innovation and business development.

Wu Xia of the CICC Kangrui Healthcare Industry Fund stated, “Kemei Diagnostics is a leading enterprise in China’s immunodiagnostic sector. Through the acquisition of Shanghai Boyang, it successfully completed a technological upgrade, achieving a leapfrog development from Chemiluminescence 1.0 to 4.0 technology and securing a commanding position in chemiluminescence technology. Its product portfolio has expanded from its traditional strength in infectious disease testing to comprehensive coverage across thyroid, oncology, and hormone diagnostics. With product quality comparable to that of top-tier international manufacturers, Kemei holds a distinct advantage in import substitution, particularly as pressure to control healthcare expenditures in China continues to intensify.”

Wu Xia stated, “Under the leadership of Mr. Li Lin, Kemei Diagnostics will maintain its leading advantage in China’s immunodiagnostic industry and gradually establish itself as a market leader in niche segments.”

CICC Kangrui Healthcare Industry Fund focuses on investing in modern healthcare services and their upstream and downstream industries. The portfolio companies demonstrate strong synergies, jointly fostering a virtuous, closed-loop ecosystem within the healthcare sector. CICC Kangrui will support Kemai Diagnostics in achieving its strategic development goals by integrating internal and external advantages, creating differentiated products, and leading in niche market segments.

As the leading enterprise in China’s chemiluminescence-based in vitro diagnostics (IVD) sector, Kemei Diagnostics has pioneered the new market for the “Eight Infectious Disease Markers” panel and ranks first among domestic chemiluminescence companies in infectious disease testing. Following the successful acquisition and integration of high-quality domestic assets, the company has achieved generational upgrades in its products and technologies, expanding into oncology, thyroid function, and gonadal hormone testing, thereby achieving comprehensive coverage of common and frequently occurring diseases. Furthermore, its substantial commercial potential will accelerate the implementation of its internationalization strategy, positioning it as a leader in emerging markets.