Guoci Materials Announces RMB 810 Million Acquisition of Aelite to Strengthen Dental Materials Portfolio

VCBeat (WeChat ID: vcbeat) has learned that Shandong Sinocera Functional Material Co., Ltd. (“Sinocera,” stock code: 300285.SZ), a listed company, recently released a draft plan for a major asset restructuring. The company proposes to acquire a 75% equity stake in Shenzhen Upcera Dental Technology Co., Ltd. (“Upcera”) through the issuance of shares, with the transaction price tentatively set at RMB 810 million. Meanwhile, it plans to raise RMB 485 million through a private placement toEstablishment of a Digital Dental Center and a Precision Denture Component Processing Center。

Prior to this transaction, Sinocera held a 25% equity stake in Upcera. In this transaction, the listed company proposes to acquire the remaining 75% equity interest in Upcera through the issuance of new shares.The transaction was valued at 810 million yuan.

However,Compared to Sinocera’s acquisition of Upcera two years ago, the target’s valuation has shrunk significantly.Based on an acquisition of a 75% equity stake for RMB 810 million, the valuation of Upcera reached RMB 1.08 billion, and Sinocera obtained 100% control. Compared to the transaction value (approximately RMB 330 million) when Sinocera acquired a 25% equity stake in Upcera two years ago, the valuation has decreased by two-fold.

In this transaction, the listed company will pay the entire consideration by issuing shares.

Meanwhile, Sinocera intends to issue shares to no more than five other specific investors to raise matching funds of up to RMB 485 million. After paying RMB 15 million to the intermediaries involved in this transaction, the raised funds are proposed to be used for Aidite’s construction of a Digital Dental Center (RMB 370 million) and a Precision Denture Components Processing Center (RMB 100 million).

As the dental healthcare market continues to expand, particularly with the growing adoption of high-margin services such as dental implants and orthodontics, dental materials are poised for significant market prospects.

Shenzhen Upcera Dental Technology Co., Ltd. was established in 2003 with a registered capital of RMB 60 million. The company has invested tens of millions of yuan in Shenzhen, Liaoning, and the Benxi Biovalley, where it has established large-scale, high-quality modern production bases.

The company is committed to developing the industries of optical communication devices, precision ceramic components, and medical dental ceramics, specializing in the research, production, and sales of precision ceramic materials and their products.It is the largest manufacturer of high-tech zirconia ceramic products in China by production and sales volume.

Leveraging the State Key Laboratory of Ceramics within the Department of Materials Science and Engineering at Tsinghua University, the company capitalizes on its interdisciplinary technological integration advantages across optical communications, healthcare, chemical engineering, electronics, and lighting to drive new product development. Through collaborations with experts from the United States, Switzerland, Japan, and Taiwan, it has achieved significant research breakthroughs in the preparation, forming, sintering, and precision machining of advanced ceramic materials.

In the medical and dental field, after years of technical preparation and clinical product testing, the company’s zirconia ceramic blocks for all-ceramic dentures have obtained comprehensive certification from domestic and international authoritative bodies, including China’s SFDA, the ISO 13485 quality management system for medical devices, the EU CE mark, and the US FDA.

2011,Upcera Launches Comprehensive Solution for Cerabien ZR All-Ceramic and Full-Zirconia Dentures, established a Digital Dentistry Experience Center at the Liaoning Aierchuang Technology Park, gradually becoming China's leading provider of comprehensive digital dentistry solutions.

According to Upcera,Aierchuang's Core Product: Zirconia Dental MaterialsCompared with traditional metallic materials, it demonstrates superior performance in mechanical properties, stability, biocompatibility, and aesthetic outcomes.

Sinocera Materials, established in 2005, is primarily engaged in the research and development, production, and sales of various high-end ceramic materials. Its main products include electronic ceramic materials for multilayer ceramic capacitors (MLCCs), nano-composite zirconia materials, high-purity ultra-fine alumina materials, ceramic ink materials for inkjet printing, and electronic pastes. Its products are widely applied in fields such as electronic information and communications, biomedicine, new energy vehicles, architectural ceramics, automotive and industrial catalysis, and solar photovoltaics.

In connection with this acquisition, Aierchuang committed that the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses for the years 2018, 2019, and 2020 (excluding the profits and losses generated by the fundraising investment projects in this transaction, namely the digital dental center business and the precision denture components processing center business)No less than RMB 72 million, RMB 90 million, and RMB 108 million, respectively. For both parties, it is undoubtedly a high-stakes gamble.

Furthermore, this acquisition will help extend Sinocera’s industrial chain.Aidite was previously a key customer of Sinocera’s dental zirconia products, with transaction volume reaching RMB 58.5105 million in 2016. By bringing Aidite under its umbrella, Sinocera will gain control over the production chain for “nano-grade zirconia–zirconia denture materials,” further extending its zirconia industry chain.

“On the one hand, the company can extend its industrial chain and enter more niche markets,Expand Profit Margins“On the other hand, the company can achieve in-depth development of its new materials platform, further enhancing its market position,” stated Sinocera.