A Medical Device Daily
Medtronic (Minneapolis) and Shandong Weigao Group Medical Polymer Co. (Hong Kong) reported the completion of Medtronic's equity investment in Weigao. As a result of the investment, Medtronic now holds a 15% equity stake in Weigao.
In accordance with the previously disclosed terms of Medtronic's equity investment in Weigao, Medtronic purchased a 15% equity interest in Weigao for about HK $1.75 billion ($221 million) through the purchase of 80,721,081 newly issued H shares of Weigao that are listed on the Hong Kong Stock Exchange at a purchase price of HK $11.138 a share, and an equal number of Weigao's unlisted ordinary shares from existing shareholders at a price of HK $10.247 a share.
In connection with the purchase of the Weigao shares, Jean-Luc Butel and Li Bing Yung, two nominees designated by Medtronic, have been appointed as non-executive directors of Weigao, effective on the completion date.
In connection with Medtronic's equity investment in Weigao, the companies undertook a joint venture to market in China Medtronic's spinal products and Weigao's orthopedic products which include therapies for the hip, shoulder, spine and trauma. The joint venture entity commenced operations in September, with an affiliate of Medtronic holding a 51% interest in the jv and Weigao holding the remaining 49% interest.
"This is a tremendous milestone in our efforts to build a broad presence in China," said Bill Hawkins, Medtronic's chairman/CEO. "This region of the world is critical to our global growth strategy. Both Medtronic and Weigao will benefit from the combination of our strengths."
In other financing news, Tri-Isthmus Group (TIGroup; Beverley Hills, California), a provider of financial solutions to the healthcare industry, reported the completion of three bank financings with local Oklahoma-based lenders in the amount of $8.4 million. TIGroup also completed the purchase of the remaining 49% of Rural Hospital Acquisition (RHA), which will immediately begin doing business as Southern Plains Medical Group (SPMG; Chickasha, Oklahoma). TIGroup, through its subsidiary First Physicians Community Healthcare Services, now owns 100% of SPMG.
The bank financing helped TIGroup complete several key strategic goals including the refinancing of existing loans of about $4.6 million with local lenders; and the purchase of the building and property of the 25-bed Stroud Municipal Hospital (Stroud, Oklahoma) and clinics for about $3.2 million.
The financing includes a 16 to 20 year amortization and an initial interest rate of prime plus 2%, subject to a floor of 7%.
Thomas Rice has become president/COO of SPMG, Donald Parkerson CFO.
The terms of the buyout included a total consideration of $1.8 million of which $300,000 will be paid out over six months and the remainder will be paid through an unsecured promissory note due December 2011 with a bullet amortization.
Southern Plains Medical Group is one of the nation's longest-established medical groups, having provided continuous service to rural Oklahoma communities since 1915. Comprised of five facilities in Oklahoma, it offers a wide range of services, including cardiology, pediatrics, oncology, orthopedics, radiology and urgent care.