Primavera Capital Makes a Strategic Investment in LBX Pharmacy Chain, the Leading Pharmaceutical Retailer in China

Primavera Capital Group and FountainVest Partners have today jointly signed an Equity Transfer Agreement with EQT Partners for the acquisition of 100% equity in Zexing Investment, the second-largest shareholder of the A-share listed company, Laobaixing Pharmacy Chain (LBX), marking the completion of a strategic investment in LBX. This deal represents an important step for Primavera in the field of healthcare. Primavera is committed to helping LBX achieve accelerated development in this evolving market.

LBX Pharmacy is one of the leading pharmaceutical retail chains in China. Operating both directly-operated and franchised stores in the pharmaceutical retail business, the company has achieved sustained and rapid growth in both scale and profits through its M&A business model, resulting in the provision of excellent pharmaceutical retail services to consumers. While committed to the traditional business management model, the company is also actively experimenting in new business areas. In recent years, it has vigorously developed pharmacy franchise and drug therapy problems (DTP) pharmacies, Chinese medicine store chains, and an online-to-offline business model, seeking new drivers for the company’s future development.

By tapping into Primavera Capital and FountainVest’s rich experience in the new retail and healthcare industries, the company will focus on four strategic areas: seizing opportunities in prescription drugs, embracing “new retail”, entering the new rural market and increasing market share. LBX strives to empower pharmaceutical retail through technological innovation while providing services that are more personal and more professional.

Zilong Xie, chairman of LBX said, “The introduction of two internationally renowned investors, Primavera Capital and FountainVest, is a significant strategic development for the company to further improve its equity structure. We will continue to seize the development opportunities brought about by prescription outflows and sector consolidation and continue to leverage its competitive advantages in pharma retail.”

Fred Hu, founder and chairman of Primavera Capital, said, “Primavera has long focused on the new growth model of China’s economy with investment in consumer retail, healthcare and high-tech industries. As a market leader in China’s pharma retail sector, LBX keeps innovating and leads by example. With the general trend of industry consolidation, chain store expansion and increasing specialization in China’s pharma retail market, LBX’s leading position will also be further reinforced. We strongly recognize the company’s long-term value and development potential and are very willing to leverage Primavera’s extensive experience and resources in M&As, new retail, and digital transformation to help the company make significant developmental strides. ”