Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising from, or in reliance upon the whole or any part of the contents of this announcement. * (Incorporated in the Cayman Islands with limited liability) (Stock Code: 00853) INSIDE INFORMATION ESTABLISHMENT OF JOINT VENTURE This announcement is made by MicroPort Scientific Corporation pursuant to Rule 13.09(2) of the Listing Rules and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). The Board is pleased to announce that on 9 January, 2014 (after trading hours of the Stock Exchange), MicroPort Shanghai, a wholly-owned subsidiary of the Company and Sorin CRM have entered into the Joint Venture Agreement, pursuant to which, MicroPort Shanghai and Sorin CRM are to form a joint venture, namely MicroPort Sorin CRM (Shanghai) Co. Ltd., to market and develop cardiac rhythm management devices including pacemakers, defibrillators, cardiac resynchronization devices and other CRM related products in the PRC. MicroPort Shanghai will hold a 51% stake in the Joint Venture Company, while Sorin CRM will hold the remaining 49% interest. In accordance with the Joint Venture Agreement, MicroPort Shanghai shall make initial capital contributions of RMB62,220,000 in cash and Sorin CRM shall make initial capital contributions of RMB59,780,000 in cash to the Joint Venture Company. LISTING RULES IMPLICATIONS As none of the relevant applicable percentage ratios (as defined in the Listing Rules) for the establishment of the Joint Venture Company exceeds 5%, the establishment of the Joint Venture Company does not constitute a notifiable transaction of the Company according to Rule 14 of the Listing Rules. The establishment of the Joint Venture Company is subject to, among other things, all necessary approvals and consents from the relevant PRC governmental and regulatory authorities, which may or may not be completed. Investors or prospective investors are advised to exercise caution in investing or dealing in the shares of the Company. 1
PRINCIPAL TERMS OF THE JOINT VENTURE AGREEMENT (a) Date 9 January 2014 (b) Parties (i) MicroPort Shanghai (ii) Sorin CRM To the best knowledge of the Directors, information and belief after having made all reasonable enquires, Sorin CRM is a third party, independent of the Company and its connected person(s). (c) Shareholding Structure of the Joint Venture Company Upon the establishment of the Joint Venture Company, MicroPort Shanghai will hold 51% of the equity interest of the Joint Venture Company and Sorin CRM will hold the remaining 49% equity interest. (d) Capital Contribution In accordance with the Joint Venture Agreement, MicroPort Shanghai shall make initial capital contributions of RMB62,220,000 in cash and Sorin CRM shall make initial capital contributions of RMB59,780,000 in cash to the Joint Venture Company. (e) Duration of the Joint Venture Company The initial duration of the Joint Venture Company shall be 10 years from the date of the issuance of its business license. The term shall be extended for additional 5 years if agreed by both parties. (f) Scope of Business The Joint Venture Company, namely MicroPort Sorin CRM (Shanghai) Co. Ltd., will be located in Shanghai and is scheduled to start operations in the first half of 2014. Subject to the approval of the PRC foreign investment examination and approval authority, and the registration with industry and commerce administrative authority, the scope of business of the Joint Venture Company shall be development, designing, assembly, manufacture and wholesale, retail, import and export of pacemaker devices, implantable cardioverter defibrillator and cardiac resynchronization therapy devices, collectively called implantable pulse generators, leads and programmers, components and other CRM related products, and conducting related research and development activities, and the provision of technical consultation, technical services, information services, medical educational services and activities and after-sale services related to the products of the Joint Venture Company. The development of locally manufactured CRM products involves significant engineering and development resources that will be undertaken by the Joint Venture Company immediately. 2
As part of the joint venture arrangements, MicroPort Shanghai will sell certain of its CRM related assets (including employees) to the Joint Venture Company. REASONS FOR AND BENEFITS OF THE JOINT VENTURE The market size for CRM medical devices in China is USD 172.9 million (2011) and is estimated to reach USD 466 million in 2018, with an annual growth of 15.2%, (GlobalData). Four international players dominate the China market, with a combined market share of over 90%. One domestic company has a presence in the market, selling single chamber pacemakers. The Company is aiming to become a market leader in China CRM market by partnering with Sorin CRM to enter China CRM market. * Source of above information: China Cardiovascular Devices Market Outlook to 2018-Cardiac Rhythm Management, Interventional Cardiology, Peripheral Vascular Devices, Electrophysiology, Prosthetic Heart Valves and Others. Published July 2012 by GlobalData Ltd. In 2010, the number of pacemaker implanted in every one million people is 29 in China, compared with 951 in Europe, suggesting significant unmet needs due to the lack of experienced physicians and affordable products. * Source of above information: China Heart Arrhythmia Interventional Therapy Statistics and Quality Control 2011, published March 2012, by Chinese Society of Cardioelectrophysiology and Pacing. The Joint Venture Company brings together two respected industry leaders, leveraging complementary strengths, namely maximizing the potential synergies of the Group s unparalleled China market coverage, strong national reputation and talented management team, together with Sorin s 40 years experience in the development and manufacture of high quality and innovative CRM devices. The Group and Sorin believe that the joint venture will be well positioned to quickly penetrate the growing CRM market in China. 1. Penetrating the China CRM market The China CRM industry is at an early stage and there will be great potential development considering the driving factors such as national healthcare reforms, economic development, aging population and improved public consciousness of healthcare in China. The Company will be able to enter the growing China CRM market rapidly and expand its high-end medical device product portfolio with full range of CRM products, including pacemakers, implantable cardioverter defibrillator, cardiac resynchronization devices, leads and programmers, components and other CRM related products. The Joint Venture Company will start with commercializing Sorin CRM s devices and ultimately realize the goal of developing locally manufactured devices, which are specifically designed to fit the needs of the growing demand in China. Eventually, the Joint Venture Company will be able to target different market segments by offering imported products to premium market, while providing locally manufactured reliable and affordable devices to value market in China. Furthermore, the Company will potentially be able to offer locally developed products to other emerging markets as well. 3
2. Strengthen leadership position in the PRC cardiovascular medical device market The Company will be able to provide total solution to cardiologist in three major cardiovascular areas named drug eluting stents, electrophysiology devices and CRM. This further strengthen the Company s leadership position in the PRC cardiovascular medical device market. 3. Shorten in-house research and development process and immediate revenue generation The Group has invested significantly in the research and development of CRM products since 2009. Currently, the Group s CRM products require further testing and clinical trials which could lead to uncertainty when these CRM products could enter the market. As the verification and approval process will be lengthy and uncertain, partnering with Sorin CRM will help the Group to shorten the in-house research and development process and reduce unforeseeable uncertainties. Furthermore, the Joint Venture Company will be able to generate immediate cash and revenue with the introduction of Sorin s products into the PRC market through the Joint Venture Company. INFORMATION ON SORIN Sorin is a global medical device company and a leader in the treatment of cardiovascular diseases. They develop, manufacture and market medical technologies for cardiac surgery and for the treatment of cardiac rhythm disorders. With 3,750 employees worldwide, Sorin focuses on two major therapeutic areas: cardiac surgery (cardiopulmonary products for open heart surgery and heart valve repair or replacement products) and cardiac rhythm management (pacemakers, defibrillators, cardiac resynchronization devices). INFORMATION ABOUT THE GROUP AND MICROPORT SHANGHAI The Group is principally engaged in the development, manufacturing and sale of high-end interventional medical devices locally and internationally. The diverse portfolio of products of the Group is now being used at an average rate of one for every 30 seconds in over 2,000 major hospitals throughout China and over 20 other countries. The Group maintains operations in a wide range of business segments including cardiovascular devices, orthopedic devices, electrophysiological devices, endovascular devices, neurovascular devices, surgical management, diabetes care and endocrinal management. The Group is dedicated to becoming a leading global enterprise capable of providing the high quality, affordable medical products and technologies to patients throughout the world. MicroPort Shanghai, a wholly owned subsidiary of the Company, is one of the key operating subsidiaries of the Company engaged in the research, manufacturing and distribution of cardiovascular devices. The establishment of the Joint Venture Company is subject to, among other things, all necessary approvals and consents from the relevant PRC governmental and regulatory authorities, which may or may not be completed. Investors or prospective investors are advised to exercise caution in investing or dealing in the shares of the Company. 4
LISTING RULES IMPLICATIONS As none of the relevant applicable percentage ratios (as defined in the Listing Rules) for the establishment of the Joint Venture Company exceeds 5%, the establishment of the Joint Venture Company does not constitute a notifiable transaction of the Company according to Rule 14 of the Listing Rules. DEFINITIONS In this announcement the following words have the following meanings unless the context requires otherwise: Board Company CRM Directors Group Hong Kong Joint Venture Agreement Joint Venture Company Listing Rules Macao MicroPort Shanghai PRC or China the board of Directors; MicroPort Scientific Corporation, a company incorporated in the Cayman Islands, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 00853); cardiac rhythm management; directors of the Company; the Company and its subsidiaries; the Hong Kong Special Administrative Region of the PRC; the joint venture agreement dated 9 January 2014 entered into between MicroPort Shanghai and Sorin CRM in relation to the formation of the Joint Venture Company; MicroPort Sorin CRM (Shanghai) Co., Ltd., a sino-foreign equity joint venture company with limited liability established under the laws of the PRC by Sorin CRM and MicroPort Shanghai; the Rules Governing the Listing of Securities on the Stock Exchange; the Macao Special Administrative Region of the PRC; Shanghai MicroPort Medical (Group) Co., Ltd ( ), a liability company limited established in the PRC and a wholly-owned subsidiary of the Company; the People s Republic of China which, for the purpose of this announcement only, does not include Hong Kong, Macao and Taiwan; 5
RMB Sorin Sorin CRM Stock Exchange Renminbi, the lawful currency of the PRC; Sorin S.p.A., a company listed on the Borsa Italiana S.p.A. (stock code: SRN), is a global medical device company and a leader in the treatment of cardiovascular diseases; Sorin CRM Holding S.A.S., a wholly-owned subsidiary of Sorin; The Stock Exchange of Hong Kong Limited; % per cent; By Order of the Board MicroPort Scientific Corporation Dr. Zhaohua Chang Chairman and Chief executive Officer Shanghai, The PRC, 9 January 2014 As at the date of this announcement, the executive Director is Dr. Zhaohua Chang; the non-executive Directors are Mr. Norihiro Ashida, Mr. Hiroshi Shirafuji and Mr. Ganjin Chen; and the independent nonexecutive Directors are Mr. Zezhao Hua, Mr. Jonathan H. Chou and Dr. Guoen Liu. * For identification purpose only 6