Warburg Pincus has achieved China ’s first leveraged buyout, for which it will borrow USD282m in order to buy a 55% stake in the Harbin Pharmaceutical Group (Shanghai SE 600664). According to news sources, the five-year loan is being arranged by Citigroup. Both Warburg and CITIC Capital Markets Holdings have taken a 22.5% stake each in Harbin Pharmaceutical, the other 10% being held by a domestic private equity partner, while the Harbin government owns the remaining 45%.
Harbin Pharmaceutical manufactures more than 700 products, including antibiotics, which is one of the more lucrative sectors of China 's pharmaceutical industry, because they carry a high price tag for consumers but are relatively cheap to produce. The company also specializes in biopharmaceuticals. The company is also a big manufacturer of traditional Chinese medicines and has one of the largest distribution networks in the mainland.