Japanese firms Mitsui & Co and Rohto Pharmaceutical have agreed to jointly acquire the Eu Yan Sang International (EYS), a 140-year-old Singapore company that retails traditional Chinese medicines.
In a statement on Thursday, Mitsui said it will establish a special purpose company (SPC) with Rohto to acquire approximately 86% of EYS’s shares from Singapore’s Righteous Crane Holding (RCH), subject to certain conditions in a sale & purchase agreement.
Once these conditions are fulfilled, the group plans to launch a takeover bid for the remaining 14% of EYS shares, while the company’s founding family will reinvest partially into the SPC as part of a “management retention arrangement”.
Even before the deal, Mitsui had an indirect interest in Eu Yan Sang since 2022 when it participated in a Tower Capital Asia fund that owns the health company.
A consortium consisting of mid-market private equity firm Tower Capital Asia, Temasek Holdings’ unit Blanca Investments, and members of Eu Yan Sang’s founding family had taken EYS private from the Singapore bourse in 2016 in a deal valuing EYS at about $196 million.
Mitsui’s existing interest in EYS will now cease as it will re-invest in EYS through the SPC.
If the SPC acquires 100% of the EYS shares, Mitsui will own approximately 30% effective interest in EYS, with Rohto owning approximately 60%, and the founding family having approximately 10%. The acquisition of 100% of EYS shares is valued at approximately S$800 million (approximately $593 million).
Founded in 1879, EYS operates over 170 retail outlets and 30 traditional Chinese medicine clinics mainly in Singapore, Hong Kong, and Malaysia. It develops and sells an extensive lineup of traditional Chinese medicine products.
Mitsui, which named healthcare and nutrition as one of its focus sectors under its Medium-term Management Plan 2023, has been developing a group-wide healthcare business cluster.
In 2018, Mitsui invested in Thorne HealthTech, an American manufacturer and supplier of advanced functional supplements. Since then, Mitsui has been working to build a “science-based, individualised solutions business for pre-symptomatic conditions”. In 2022, Mitsui and Thorne jointly established a business entity in Singapore.
Last week Bloomberg reported that Mitsui and Rohto Pharmaceutical were nearing a deal to acquire a majority stake EYS, citing sources.