China Hospital Operator Accepts $466 Million Buyout Offer from TPG Capital and Fosun Pharma

China hospital chain Chindex International Inc. has accepted its second buyout offer in as many months from Shanghai Fosun Pharmaceutical Co. and private equity firm TPG Capital. The deal has a total value of $466 million, including restricted shares.

Chindex, a Bethesda, Md.-based healthcare company that operates hospitals in Beijing, Shanghai, Tianjin, and Guangzhou, announced on February 17 that it had accepted an offer of $369 million from Fosun Pharma and TPG Capital. After an anonymous bidder made an offer of $416 million last week, Fosun Pharma and TPG Capital increased their bid to $24 per share for a total purchase price of $466 million.

As part of the agreement, Fosun Pharma will increase its 17.45 percent stake in Chindex—purchased in August 2010 for $14 million—to 48.65 percent, and TPG will acquire a 48.14 percent stake. Chindex’s remaining shares will be held by the company’s CEO and founder, Roberta Lipson. Fosun plans to spend as much as $223.6 million to privatize Chindex. The company will also invest an additional $45 million for a 30 percent stake in Chindex Medical Ltd., a joint venture medical device distributor established by Chindex and Fosun Pharma in December 2010.

The deal, if approved by stockholders and Chinese antitrust authorities, could reap benefits for all three companies. With China’s healthcare sector estimated to reach $1 trillion by 2020, according to McKinsey & Company, the acquisition positions Fosun and TPG to have greater access to this fast-growing market. The deal also provides working capital that Chindex can use to overcome expansion challenges in China.