Chengxuan will make a payment to the company upon the closing of the sale and two other payments during the year after the closing. Chengxuan is owned by Xiaodong Wu, the chairman and CEO of the company.
The company will receive cash from the sale and plans to invest in developing existing advanced IVD businesses to continue to generate recurring and growing revenues. The transaction is expected to close before the end of December 2008, subject to customary closing conditions.
Sam Tsang, director and CFO of China Medical Technologies, said: “This transaction will strengthen our financial position, further enhancing our ability to capitalize on the opportunities we see in molecular diagnostics in China. This will further support our efforts to develop additional molecular diagnostics products.”