Blackstone Buying Into China Animal Healthcare

(Reuters) – Investors led by Blackstone (BX.N) are taking a “substantial” stake in China Animal Healthcare (CAHC.SI), a Singapore-listed maker drugs for livestock that is hoping to boost its animal vaccine business.

Blackstone will invest about $45 million in China Animal by buying new shares and convertible bonds, sources familiar with the matter told Reuters on Friday.

An agreement was signed on Friday and an announcement is expected before Monday. China Animal suspended trading in its shares.

The firm’s market cap is around $356 million, according to Thomson Reuters data.

“This deal will help open doors to attract more investors and bigger funds, and put the firm on the investment radar,” a source directly involved in the deal said.

Blackstone earlier this year led a consortium that invested about $600 million in China Shouguang Agricultural Product Logistic Park, one of the country’s biggest agriculture market operators. [ID:nTOE62H02W]

The U.S. private equity firm has also been active in India, where its country head said it will invest roughly $1-1.5 billion in Indian infrastructure over the next 5 years. [ID:nSGE6610D4]

Blackstone’s rival Carlyle [CYL.UL] earlier this week announced it will invest $190 million in Singapore-listed China Fishery (CNFG.SI). [ID:nSGE65S0EY]

China Animal makes and distributes drugs for livestock. The firm is focusing its efforts on animal vaccines and already manufactures three of the four compulsory vaccines required for livestock in China.

It is looking to broaden its investor base by seeking a dual listing in Hong Kong.

Blackstone could not be reached, while the Chinese firm’s external public relations agency declined comment.

DBS Vickers, which has a “buy” on China Animal, expects the launch of two new vaccines to drive earnings growth in 2010.

The Chinese firm posted a 46 percent rise in net profit to 36.6 million yuan in the first three months of 2010 as sales soared 53 percent to 115.2 million yuan.

Shares of China Animal have risen 45.5 percent so far this year and were last traded at S$0.32.

(Reporting by Charmian Kok and Saeed Azhar; editing by Kevin Lim)