The management believes that it is in the best interest of the company to focus its resources on the company’s advanced in-vitro diagnostic (IVD) operations which provide recurring revenue from selling consumables for diagnostic purposes.
As a result, the management decided to look for potential buyers for the high intensity focused ultrasound (HIFU) business and contacted several medical device companies which could be potential buyers. The management indicated to them the intention to sell the HIFU business but did not receive an interest from any of them. The management then turned to Xiaodong Wu, the CEO of Chengxuan International, and received his interest in purchasing the HIFU business.
The company engaged an international firm to carry out an independent valuation of the HIFU business and received a fair value range between $52.9 million and $61.4 million. The final selling price after negotiation was determined at $53.5 million.
As the company has completed the sale of the HIFU business, it has become a pure advanced IVD company. The company expects to use the proceeds from the sale of the HIFU business to support the further development of its molecular diagnostic businesses.