KKR & Co. (KKR), the private-equity firm run by Henry Kravis and George Roberts, agreed to buy $65 million of convertible notes issued by China Cord Blood (CO) Corp., according to a regulatory filing.
The notes, which yield 7 percent, can be converted into shares at $2.838, the document showed. China Cord Blood rose 5.6 percent to $2.85 in New York trading yesterday.
China Cord Blood, listed on the New York Stock Exchange since 2009, collects umbilical cord blood from newborns. The company has exclusive licenses to service Beijing city and the Guangdong and Zhejiang provinces, covering 180 million people and 1.9 million births a year, according to a statement from KKR and China Cord Blood yesterday.
China spent twice as much on health care last year as in 2008 and health insurance coverage more than tripled to 96 percent of citizens last year compared with 2003. China Cord Blood’s profit almost doubled to $14 million in the latest fiscal year as sales jumped, according to data compiled by Bloomberg. The company’s shares have lost 15 percent in the past year.
Citigroup Inc. advised New York-based KKR on the transaction, according to the statement.
China Cord Blood marks KKR’s first investment in a Chinese health care company. The private-equity fund owns stakes in Chinese companies in industries ranging from financial leasing to farming and cement. The New York-based fund in September formed a real estate venture with Sino-Ocean Land Holdings Ltd. (3377) with each firm committing $70 million.
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