Acquisition of Chindex International, Inc. by TPG Capital May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Chindex International, Inc. (NASDAQ: CHDX) by a consortium of buyers led by an affiliate of TPG, and including an affiliate of Shanghai Fosun Pharmaceutical Group Co., Ltd., and Chindex CEO Roberta Lipson. On February 17, 2014, the companies announced the signing of a definitive agreement pursuant to which the consortium will acquire all outstanding shares of Chindex stock for $19.50 per share in cash.
Is the Proposed Merger Best for Chindex and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Chindex is undertaking a fair process to obtain maximum value and adequately compensate Chindex shareholders. As an initial matter, the $19.50 merger consideration represents a premium of only 13.7% based on Chindex’s closing price on February 14, 2014. That premium is substantially below the average one day premium of over 46% for comparable transactions in the past three years.
In addition, on November 11, 2013, Chindex released its financial results for the third quarter ended September 30, 2013, reporting the highest third quarter revenue performance in the company’s history. Specifically, Chindex’s reported third quarter healthcare services revenue increased $43.1 million, or 16%, compared to the same quarter 2012, while the company’s Beijing Rehabilitation Hospital began to generate revenue. In addition, for the nine month period ended September 30, 2013, Chindex’s revenue from healthcare services increased to $130.6 million, or 20%, compared to $108.9 million in the same period 2012.
In commenting on the company’s results and future prospects, Roberta Lipson, President and CEO of Chindex, remarked that, “Chindex’s third quarter revenue growth, although lower than original expectations, has in fact resulted in the Company’s highest revenue third quarter performance to date.” Ms. Lipson also noted that “he Chinese government has recently made unprecedented pronouncements on the key role of private healthcare in the continued healthcare reform process, reiterating the expectation that 20% of care will come from the private sector by 2015, and that by 2020 the healthcare market will be an RMB 8 trillion (USD$1.3 trillion) industry. Chindex is best positioned as the earliest and largest private premium healthcare provider in China to capture this tremendous opportunity.”
Given these facts, Robbins LLP is examining the Chindex board of directors’ decision to sell the company to TPG now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Chindex shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Chindex shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
