Terumo Acquires China-based Essen Technology To Enter Drug-eluting Stent Market in China
TOKYO, JAPAN – July 24, 2018 – Terumo Corporation (TSE: 4543) today announced that it has entered into an agreement to acquire Essen Technology (Beijing) Co., Ltd., a Chinese medical device company. Under the terms of the agreement, Terumo will pay 879 million Chinese Yuan* upfront and milestone payment based on the future performance. The transaction is aimed to close within 2018 after all conditions precedent are met. It will be funded through cash on hand and Terumo does not regard the impact of the acquisition on Terumo's business performance of the fiscal year ending March 31, 2019 as significant.
Essen Technology is a specialized enterprise of drug-eluting stents (DES). Terumo has grown rapidly in China selling interventional products, such as guidewires and balloon catheters. However, it has not yet offered coronary stents in that market.
Terumo has expanded its DES sales coverage to include Japan, Europe, Asia, and Latin America, for a total of over 40 countries. This acquisition will add China, which is expected to become the biggest market in a few years, to Terumo's geographical DES portfolio. In China, there are more than 750,000 percutaneous coronary intervention cases, and they are projected to increase by over 10% annually.
"The product lineups of the two companies are highly complementary, and the importance of domestic products in China is increasing," said Hikaru Samejima, President, Cardiac and Vascular Company of Terumo. "We believe this acquisition is significant."
Entering the Chinese market with a domestically manufactured DES helps Terumo to expand its interventional systems business.
Notes: Terumo's regional strategy for China
Terumo has pursued its strategy in each region appropriately to the local market and its position there, while globalizing uniformly under business-led management. Terumo has moved to localize its business in China, entering into alliances with local players in selected fields, including peritoneal dialysis, renal denervation catheters and neuroendovascular therapy.
About Essen Technology Co., Ltd.
|Company name:||Essen Technology (Beijing) Co., Ltd.|
|HQ Location:||Beijing, China|
|Business:||Development, manufacture, and sale of drug-eluting stents|
|Revenue:||Approx. 140 million Chinese Yuan** (FY2017)|
|Capital ties:||A wholly owned subsidiary of Shanghai Kinetic Medical Co., Ltd.|
* The upfront amount is approx. US$ 129 million (FX: USD=6.8CNY)* The upfront amount is approx. US$ 129 million (FX: USD=6.8CNY)
** The revenue of Essen Technology is approx. US$ 21 million (FX: USD=6.8CNY)
About Terumo Corportation
Tokyo-based Terumo Corporation is one of the world's leading medical device manufacturers, with over $5 billion in sales and operations in more than 160 nations. Founded in 1921, the company develops, manufactures and distributes world-class medical devices, including products for use in cardiothoracic surgery, interventional procedures and transfusion medicine; the company also manufactures a broad array of syringe and hypodermic needle products for hospital and physician-office use. Terumo contributes to society by providing valued products and services to the health care market, and by responding to the needs of health care providers and the people they serve. Terumo Corporation's shares are listed on the first section of the Tokyo Stock Exchange (No. 4543, Reuters symbol <4543.T>, or Bloomberg 4543: JP) and is a component of the Nikkei 225, Japan's leading stock index.