By Dave Sebastian
Adicon Holdings, a laboratory-testing provider in China, is seeking to raise $52.3 million through a Hong Kong initial public offering, with the bulk of the demand coming from pre-ordered shares.
Cornerstone investors, which agree to buy shares at the IPO price and hold them for a set period, have agreed to snap up 71% of Adicon shares on offer. They include some of Adicon’s suppliers and investment entities owned by one of the company’s founders and an investor who is acquainted with certain Adicon board members.
Adicon, which counts private-equity firm Carlyle Group as a backer, is taking orders from investors from Monday until Friday. It has set a price of 12.32 Hong Kong dollars (US$1.58) a share, and plans to list June 30.
The company provides testing services to hospitals and health-check centers through 33 laboratories across China. It generated profit of 684.9 million yuan (US$96.1 million) on revenue of CNY4.86 billion in 2022.
Adicon said it plans to use proceeds from the offering to enhance its laboratory network, develop new testing methods and help automate laboratory processes and logistics.
New and secondary listings in Hong Kong have raised $2.05 billion this year, down 13% from the same period last year and a far cry from 2021 levels, according to Dealogic.
Many deal makers now have a gloomy outlook for the market for international Chinese IPOs this year, after starting 2023 with a sense of optimism following the end of zero-Covid. Some companies that went public in Hong Kong in recent months have also seen poor after-market performance.
Write to Dave Sebastian at dave.sebastian@wsj.com
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