MicroPort Scientific Corporation (HK: 00853) and Sorin Group (MIL:SRN) (Reuters Code: SORN.MI), announced today that they have entered into a definitive agreement to form a joint venture to market and develop cardiac rhythm management (CRM) devices (implantable pacemakers, defibrillators, cardiac resynchronization devices and related devices) in China. MicroPort will hold a 51 percent stake in the joint venture entity, while Sorin will hold the remaining 49 percent interest. In accordance with the agreement, MicroPort and Sorin shall make initial capital contributions of, respectively, RMB62,220,000 (USD10.2 million) and of RMB59,780,000 (USD9.8 million) in cash in the joint-venture company.
The new venture, which will be named MicroPort Sorin CRM (Shanghai) Co. Ltd., will be located in Shanghai and is scheduled to start operations in the first half of 2014. Under the agreement, the two companies will collaborate, through the joint venture, on the import, sale and service of Sorin's CRM devices in Greater China and, in parallel, in accelerating the development of locally manufactured CRM products for the Chinese market. Significant engineering and development resources from both parties will transition to the joint venture immediately.
This new venture brings together two respected industry leaders, leveraging complementary strengths: MicroPort's unparalleled Chinese market coverage and strong national reputation and Sorin's 40 years' experience in the development and manufacture of high quality and innovative CRM devices. MicroPort and Sorin believe that the joint venture will be well positioned to quickly penetrate the growing CRM market in China. According to industry research, the Chinese CRM market, still underpenetrated, is estimated to be approximately USD500 million, growing approximately 10% per year in the next 5 years.
"This agreement represents a key milestone in MicroPort's strategy, enabling us to enter in the rapidly growing Chinese CRM market and expanding our high-end medical device product portfolio. We recognize Sorin as an innovative player in the CRM field and we are looking forward to supporting the commercialization of Sorin's devices and ultimately realizing our goal to develop locally manufactured devices which are specifically designed for China and fit the needs of the growing demand in our country", commented Dr. Zhaohua Chang, Chairman and Chief Executive Officer of MicroPort Scientific Corporation.
"This is an important milestone in our strategy to build a local presence in China. Access to CRM therapies in China is expected to expand rapidly and the market should grow at double digit rates in the foreseeable future. Expanding our footprint in China in CRM is key to our long-term growth strategy," said André-Michel Ballester, Chief Executive Officer of Sorin Group. "MicroPort, whose strong reputation, broad distribution network and talented management team is recognized by its customers, is the ideal CRM partner for Sorin in China."
The transaction is subject to customary closing conditions, including receipt of regulatory clearances.