FountainVest Partners acquires 25% stake in LBX Pharmacy with Primavera Capital


HONG KONG, November 28, 2019 — Leading Asian private equity firm FountainVest Partners today announced that it has acquired a 25 percent stake in LBX Pharmacy Chain Joint Stock Company, together with Primavera Capital.

LBX Pharmacy, founded in 2001, is one of the earliest pharmaceutical retail firms in China to start a chain trial. Over the past 20 years, LBX Pharmacy has established a retail network with more than 4,800 stores across 22 provinces and cities in China. LBX Pharmacy was listed on the Shanghai Stock Exchange in 2015 (stock code: 603883).

While LBX Pharmacy is paying attention to traditional pharmaceutical retail, the company is also innovating to actively develop new retail models, such as franchises, direct to patient (DTP) drugstores and Chinese medical centers, and to combine online businesses with offline retail.

As China accelerates the pace of medical reform, a series of policies are being carried out in the medicine market, such as improving the efficiency of health insurance payments and decreasing the proportion of prescription medicines purchased at hospitals versus pharmaceutical stores. As a result, retail pharmacies will further strengthen their position in the field of pharmaceutical circulation.

With China’s solid economy and aging population, the nation’s expenditure for medical care and public health and its per capita expenditure on health are increasing rapidly. This brings strong market demand for pharmacies, and leading enterprise LBX Pharmacy is playing a more important strategic role in the pharmaceutical retail sector.

Frank Tang, chairman and CEO of FountainVest Partners, said, “We are delighted to have the cooperation with LBX Pharmacy, one of the largest pharmaceutical retail firms in China with broad network and strong competency. We look forward to leveraging FountainVest’s expertise and resources in new retail and healthcare industries to help LBX Pharmacy achieve better and faster development and offer people more comprehensive and high-quality pharmaceutical services.

“Driven by the upgrading of technology and industry consolidation, we believe China’s retail pharmacies are embracing huge development opportunities. This is in line with the trend of Chinese medical reform and efficiency improvement, which is an important reason for FountainVest showing great confidence in the Chinese healthcare industry,” said Tang.

Fred Hu, founding partner and chairman of Primavera Capital Group, said, “Primavera pays attention to new growth models of the Chinese economy and has investment layouts in the consumer, healthcare and technology industries. LBX Pharmacy, a leader in the Chinese pharmaceutical retail industry, has promoted industry reform. As the Chinese pharmaceutical retail market is speeding up integration as well as chain and professional development, the position of LBX Pharmacy will be further strengthened. We highly recognize the long-term value and development potential of LBX Pharmacy and will help the company in its next phase of growth.”

Xie Zilong, chairman of LBX Pharmacy said, “We are honored to partner with FountainVest Partners and Primavera Capital. Introducing the two international investors is an important strategic measure for us to further improve our equity governance structure. We believe the experience and global network of FountainVest and Primavera will help us strengthen our competitive edge and empower pharmaceutical retail with technological innovation so as to provide people with better services.”

As strategic investors, FountainVest and Primavera will offer LBX all-around strategic support and resource coordination. FountainVest has a proven track record as an experienced and successful investor in the healthcare industry across the region and has helped build successful businesses and leading brands such as CITIC Pharmaceutical, Chang’an Hospital, Kehua Bio-Engineering, Tencent Trusted Doctors, Antengene and Chaoju Medical.

About FountainVest Partners

FountainVest Partners is one of the most established independent private equity firms in Asia. The firm focuses on long-term investments in industry leaders, partnering closely with management teams to accelerate growth and create value in diversified areas including strategy, operations, finance, and capital markets. FountainVest has completed a number of successful landmark investments globally. Sectors of focus include consumer, media & technology, healthcare, industrials, and financial services. FountainVest manages assets on behalf of world leading public pensions, sovereign wealth funds, and other institutional investors.

About Primavera Capital Group

Primavera Capital Group was founded in 2010 by Fred Hu, a renowned economist. It is a China-based global investment firm with offices located in Beijing and Hong Kong. Primavera manages both RMB and USD funds and focuses on sectors of technology/Internet, consumer, education, healthcare and financial services.

About LBX Pharmacy Chain Joint Stock Company

LBX Pharmacy is a leading pharmaceutical retail firm in China and one of the Top 100 Chinese Retail Companies. Since it was founded in 2001, the company has established a retail network with more than 4,800 stores across 22 provinces and cities in China. LBX Pharmacy has assets totaling 9.4 billion yuan ($1.34 billion) and more than 20,000 employees.