The wave of mergers and acquisitions in medicine and medical care has been surging and Jiuyou Capital has accurately realized the exit of mergers and acquisitions under the careful consideration

When investment and financing are cold, "mergers and acquisitions" become a new trend

Under the influence of multiple factors such as the repeated outbreak of new crown pneumonia, macroeconomic pressure, and the cooling of biopharmaceutical valuations in the secondary market, the investment and financing of the medical and health industry will be cold in 2022, which has basically become the consensus of

However, under the adverse trend, there is no "way to live"

Recently, Kunshan Leisheng Medical Technology Co.

"Dr.

"Projects can't just go public

3-year layout to achieve accurate M&A exit

Is it to continue to increase the capital? Or do you want to take the road of mergers and acquisitions together with the founders?

In 2021, Jiuyou Capital, which has led the investment in Leisheng Medical in the A round of financing, reached a "fork in the road"

According to public information, Leisheng Medical was established in 2017 and has long focused on scientific research and development of high-end segmented active minimally invasive surgical products

After completing the Series A financing led by Jiuyou Capital in 2020, Leisheng Medical carried out the clinical work of the intravenous luminal closure system under research smoothly, and has cooperated with four well-known hospitals in China, and the performance of the company's products has been verified

"For related products to obtain registration certificates, everyone is quite confident

However, in the current overall cold of medical and health financing, can the company's subsequent profits match the high valuation? Will there be a change in the direction of policy? Can the core team that lacks marketing capabilities successfully complete the sales work? Will the market competitors catch up? These are all questions that are on the table and cannot be avoided

"If you take the merger and acquisition, it is more difficult

In fact, as early as the beginning of contact with Leisheng Medical in 2019, Jiuyou Capital had the idea of exiting through mergers and acquisitions

"Leisheng Medical's vascular ablation products for the treatment of varicose veins are still good, the research and development capabilities are OK, the product market direction is good, and the import substitution space is large

After several thoughts, Jiuyou Capital finally adhered to the judgment

In 2021, jiuyou capital life science and technology fund phase I further acquired the old shares of Leisheng Medical, with a shareholding ratio of 35.

Soon, Jiuyou Capital and Leisheng Medical "matched" Kangqiao Capital, which is good at investing in the middle and late growth and M&A medical and health industries, and recently reached an M&A agreement
.

At this point, a carefully considered M&A case has been settled, and Jiuyou Capital has achieved a precise exit
.

The wave of M&A in healthcare is surging

"During this process, Jiuyou also thought repeatedly, and there were contradictions and struggles
.
"

The myths generated by Jiuyou Capital's merger and exit are also common problems often faced by domestic VC/PE institutions
.

"From the perspective of the LP, I definitely hope that the project can go public and get the most returns
.
" From the perspective of the founder of the invested company, that is, there is a consideration of interests, but also the obsession with the glory of running a listed company, and he is rarely willing to commit to being acquired
.
Institutions want to exit through mergers and acquisitions, and there is a lot of
pressure.
Some domestic private equity fund partners said
.

However, the current overall pressured economic environment and the relatively low secondary market valuation have also made investors and founders begin to face up to the current situation
of investment and financing in the medical and health field.

Since the outbreak of the new crown pneumonia epidemic, capital has poured into the medical track, and the valuation of enterprises in the industry has been inflated
as a whole.
Since the middle of 2021, the valuation bubble in the secondary market has burst, the value system has been reconstructed, and projects and investors have become more and more rational
.
By 2022, new drug financing will continue to maintain a downward trend
.

According to the statistics of the Pharmaceutical Cube InvestGO database, the overall investment and financing trend in the medical and health field slowed down
in the first half of 2022.
In the first half of 2022, there were 583 investment and financing incidents in the primary market in the national medical and health field, down 46.
7% and 45.
9% year-on-year and month-on-month, respectively, involving an investment and financing amount of 67.
1 billion yuan
.

At the other end, the M&A market is beginning to feel the temperature
.
According to Zero2IPO research statistics, as of August 9, there have been 175 mergers and acquisitions in the domestic biomedical industry this year, involving an amount of 48.
6 billion yuan
.
Biomedical mergers and acquisitions also surged in 2021, with 308 mergers and acquisitions and a total amount of 251.
625 billion yuan
involved in mergers and acquisitions.

It can be said that the merger and acquisition case of Leisheng Medical also reflects the trend of investment and financing in the domestic pharmaceutical and medical industry in the short term
.

The above-mentioned fund partners said that in recent years, entrepreneurs with international first-line innovation capabilities have emerged in an endless stream, but the companies they have built are often more inclined to "small and beautiful", and their innovative strength is gradually being recognized internationally, but they often do not have the ability to commercialize and are difficult to go public
.
"I feel like there will be a lot of mergers and acquisitions
in the future.
"

"Overseas, it's very common for a team of doctors or scientists to sell a product or an
entire company.
Chinese entrepreneurs have yet to adapt to this rhythm
.
In the future, after the success of entrepreneurs' entrepreneurship, they will accumulate wealth through mergers and acquisitions, and then continue to start a business, which will surely become the mainstream of the industry, and it is impossible for all companies to end up going public
.
The partner said
.

In this regard, Jiuyou Capital is also deeply touched
.

"Projects can't just go public, and future mergers and acquisitions should be a boom
.
" From the perspective of investment institutions, Jiuyou Capital is not only concerned about the floating profit on the book, in the current economic environment is relatively under pressure, we hope to combine market changes, fall into the bag, responsible
for the LP.
He Xu said
.