BioLight’s subsidiary IOPtima Ltd (of which BioLight Life Sciences Ltd (TA:BOLT) holds a 70% ownership stake) entered into a binding agreement for it to be acquired in a four-stage process by Chengdu Kanghong Pharmaceuticals Group Co Ltd (SZ:002773). (Chengdu). The total cash proceeds that BioLight is anticipated to receive, by mid-2021, would be between $23m and $27.3m; we estimate it would receive about $12m by mid-2018. We now obtain an rNPV valuation of NIS112.5-134.3m (up from NIS109.7-130.7m, previously).
Initial cash proceeds to BioLight by mid-2018
The initial tranche, expected within 60 days, calls for Chengdu to invest $7m directly in IOPtima for a 19% stake, reducing the stake of existing shareholders (BioLight’s will be lowered to 55-57%). In the three subsequent stages of the deal, Chengdu will purchase the remaining IOPtima shares from BioLight and the other shareholders. The second stage, expected within six months of the first, would involve Chengdu purchasing 41% of total outstanding shares for $17.2m. As BioLight’s equity stake would be reduced to c 27-28%, we estimate that it would receive c $12m at this point. In the two remaining stages, scheduled for Q219 and Q221, respectively, Chengdu would acquire the remaining shares in IOPtima (acquiring 20% in each stage), with the pricing to be determined based on IOPtima’s performance.
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