Blackstone backs implants in China

This is the firm’s first foray into the China medical device sector

The Blackstone Group has made a “significant investment” in one of China’s leading manufacturers of orthopaedic implants for trauma, spine, and joint applications, the firm said in a statement.

Blackstone did not reveal any financial details of its investment in Xinrong Best Medical Instrument Co., or disclose the size of the stake. According to media reports, Blackstone is thought to be investing around $100 million in the company.

Blackstone did not respond to a request for further comment at press time.

“With China’s ageing population and increasing disposable income, the market growth for orthopaedic implants is significant,” Blackstone senior managing director Yi Luo said in a statement.

According to projections from the Boston Consulting Group, the total China orthopaedic implant market is expected to grow from $1.3 billion in 2013 to $4.1 billion in 2020, equating to an 18 percent compound annual growth rate. This is driven by an ageing population, increasing disease prevalence, improving treatment rate and increasing affordability.

This investment in Xinrong is Blackstone’s second in China from its current fund. Last October, a consortium led by Blackstone took private global IT consulting firm Pactera Technology, which is headquartered in China, in a deal valued at $625 million.

While this is Blackstone’s first deal in China’s medical device sector, the firm has made similar investments in the US. In June of 2007 Blackstone teamed up with Kohlberg Kravis Roberts, TPG and Goldman Sachs Capital Partners to pay $11.4 billion for medical device manufacturer Biomet, and the same year the firm acquired DJO, a specialist in orthopaedic products for rehabilitation, pain management, and physical therapy for $1.6 billion.