iKang Healthcare Group, Inc. (“iKang” or the “Company”) (Nasdaq:
KANG), a major provider in China’s fast growing private preventive
healthcare services market, today announced that IK Healthcare
Investment Limited (“Parent”) and IK Healthcare Merger Limited
(“Merger Sub”) have informed the Special Committee (the “Special
Committee”) of the Board of Directors of the Company that Parent
and Merger Sub are re-evaluating the commercial viability of the
merger (the “Merger”) contemplated under the Agreement and Plan of
Merger, dated as of March 26, 2018, entered into by and among
Parent, Merger Sub and the Company (as amended on May 29, 2018, the
“Merger Agreement”), and have requested an extension of the
termination date under the Merger Agreement from September 26, 2018
to October 31, 2018.
Parent and Merger Sub made a public announcement
regarding their current intentions with respect to the Merger and
their request for an extension of the termination date under the
Merger Agreement. A copy of the announcement is attached as
Annex A to this press release. The Special Committee and the
Board of Directors of the Company (the “Board”) are currently
evaluating the request to extend the termination date by Parent and
Merger Sub.
Due to the absence of any certainty as to
whether the Buyer Group will proceed to consummate the Merger (even
if the requested extension is agreed by the parties), the Special
Committee and the Board are currently evaluating the potential
risks to the Company if the Merger process is further delayed in
light of, among other factors, the upcoming maturity in December
2018 of certain convertible loan agreements entered into by iKang
Healthcare Technology Group Co. Ltd., one of our affiliated PRC
entities, with an aggregate outstanding principal amount of RMB850
million (equivalent to approximately US$124.23 million) (the
“Convertible Loans”). The Company currently does not have
sufficient cash to repay the Convertible Loans. If the Merger
is not consummated or the process is further delayed, the Company
may not have adequate time or otherwise be able to obtain
sufficient financing to repay and/or refinance the Convertible
Loans in amounts or on terms acceptable to the Company, if at
all. Accordingly, the Special Committee and the Board have
instructed management of the Company to explore potential financing
alternatives for the Company in the event that the Merger is not
consummated.
As previously disclosed, Parent and Merger Sub
are not obligated to proceed with consummation of the Merger
because the closing condition under Section 7.02(e) of the Merger
Agreement is not satisfied. This closing condition provides
that the holders of no more than 15% of the total issued and
outstanding shares of the Company have validly served notices of
objection under Section 238(2) of the Cayman Islands Companies Law
to object to the Merger. As of the deadline for shareholders to
serve such notices of objection, the Company had received such
notices from holders of the Company’s Class A common shares
representing, collectively, approximately 32.37% of the total
issued and outstanding shares of the Company. The Company has
formally requested that Parent and Merger Sub waive this closing
condition. However, Parent and Merger Sub have indicated that
they do not presently intend to waive the closing condition based
on current circumstances. As such, the Company cautions its
shareholders and others considering trading its securities that,
due to the non-satisfaction of the closing condition in Section
7.02(e) of the Merger Agreement, Parent and Merger Sub are not
obligated to consummate the Merger or the other transactions
contemplated by the Merger Agreement.
About iKang Healthcare
Group, Inc.iKang Healthcare Group, Inc. is one
of the largest providers in China’s fast-growing private preventive
healthcare space through its nationwide healthcare services
network.
iKang’s nationwide integrated network of
multi-brand self-owned medical centers and third-party facilities,
provides comprehensive and high-quality preventive healthcare
solutions across China, including medical examination, disease
screening, outpatient service and other value-added services.
iKang’s customer base primarily comprises corporate clients, who
contract with iKang to deliver medical examination services to
their employees and clients, and receive these services at
pre-agreed rates. iKang also directly markets its services to
individual customers. In the fiscal year 2017 ended March 31,
2018, iKang served a total of 6.59 million customer visits under
both corporate and individual programs.
As of September 7, 2018, iKang has a nationwide
network of 115 self-owned medical centers, covering 33 of China’s
most affluent cities: Beijing, Shanghai, Guangzhou, Shenzhen,
Chongqing, Tianjin, Nanjing, Suzhou, Hangzhou, Chengdu, Fuzhou,
Jiangyin, Changzhou, Wuhan, Changsha, Yantai, Yinchuan, Weihai,
Weifang, Shenyang, Xi’an, Wuhu, Guiyang, Ningbo, Foshan, Jinan,
Bijie, Qingdao, Wuxi, Kaili, Mianyang and Zhenjiang, as well as
Hong Kong. iKang has also extended its coverage to over 200 cities
by contracting with over 400 third-party facilities, which include
select independent medical examination centers and hospitals across
all of China’s provinces, creating a nationwide network that allows
iKang to serve its customers in markets where it does not operate
its own medical centers.
Forward-looking StatementsThis
press release contains forward-looking statements. These
statements, including management quotes and business outlook, are
made under the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as “will,”
“estimate,” “project,” “predict,” “believe,” “expect,”
“anticipate,” “intend,” “potential,” “plan,” “goal” and similar
statements. iKang may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Such
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements. These forward-looking statements
include, but are not limited to, statements about: the expected
timing of the completion of the Merger; whether various closing
conditions for the Merger will be satisfied or waived; the
Company’s goals and strategies; its future business development,
financial condition and results of operations; its ability to
retain and grow its customer base and network of medical centers;
the growth of, and trends in, the markets for its services in
China; the demand for and market acceptance of its brand and
services; competition in its industry in China; relevant government
policies and regulations relating to the corporate structure,
business and industry; fluctuations in general economic and
business conditions in China. Further information regarding these
and other risks is included in iKang’s filing with the Securities
and Exchange Commission. iKang undertakes no duty to update any
forward-looking statement as a result of new information, future
events or otherwise, except as required under applicable law.
IR Contact:iKang Healthcare
Group, Inc.Christy XieDirector of Investor RelationsTel: +86
10 5320 8599Email: ir@ikang.comWebsite: www.ikanggroup.com
FleishmanHillardEmail: ikang@fleishman.com
Annex A: Buyer Group Re-Evaluates iKang
Acquisition and Requests Extension of Termination Date
BEIJING, Sept. 7, 2018 -- IK Healthcare
Investment Limited ("Parent") and IK Healthcare Merger Limited
("Merger Sub") have informed the Special Committee (the "Special
Committee") of the Board of Directors of iKang Healthcare Group,
Inc. (the "Company") that Parent and Merger Sub are re-evaluating
the commercial viability of the merger (the "Merger") contemplated
under the Agreement and Plan of Merger, dated as of March 26, 2018,
entered into by and among Parent, Merger Sub and the Company (as
amended on May 29, 2018, the "Merger Agreement"), and have
requested an extension of the termination date under the Merger
Agreement from September 26, 2018 to October 31, 2018.
Pursuant to the Merger Agreement, the
obligations of Parent and Merger Sub to consummate the Merger are
subject to the condition that holders of no more than 15% of the
shares of the Company have served notices of objection under
Section 238(2) of the Cayman Islands Companies Law (the
"Condition"). On August 20, 2018, the shareholders of the
Company approved the Merger Agreement. However, as previously
disclosed by the Company, the Special Committee has notified Parent
and Merger Sub that the Condition has not been satisfied. It
is expected that the Company will receive by late September 2018
any formal notices of decision to dissent under Section 238(5) of
the Cayman Islands Companies Law ("Dissenter Notices").
In light of the fact the Condition is not
satisfied and the timing for the Company's receipt of Dissenter
Notices, Parent and Merger Sub have requested an amendment to the
Merger Agreement which would provide for an extension of the
termination date under the Merger Agreement from September 26, 2018
to October 31, 2018 so that the sponsors of Parent and Merger Sub
(the "Sponsors") have sufficient time to re-evaluate the commercial
viability of the Merger. The Special Committee is currently
considering this request.
The Sponsors do not presently intend to cause
Parent and Merger Sub to waive the Condition based on current
circumstances. The Sponsors will consider the final percentage of
dissenting shareholders among other relevant factors, including the
recent business performance of the Company, in determining whether
to proceed with consummation of the Merger.
Contact Information
To the Sponsors:
Attention: Terry Yin
Address: Suite 3008, Tower 2, China Central
Place, 79 Jianguo Road, Chaoyang District, Beijing
Email: terry.yin@yfc.cn
Fax: +86 10 5969 6010
SOURCE IK Healthcare Investment Limited and IK
Healthcare Merger Limited
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