Concord Medical to acquire radiotherapy, diagnostic imaging centers in China

Concord Medical Services Holdings Limited (NYSE: CCM), operator of the largest network of radiotherapy and diagnostic imaging centers in China, announced that its wholly owned subsidiary, Shenzhen Aohua Medical Device Leasing Co., Ltd., has entered into a definitive agreement to acquire 100% of the equity interest in Tianjin Kangmeng Radiology Equipment Management Co., Ltd., a company that manages four radiotherapy and diagnostic imaging centers in Hebei province.

Under the terms of the agreement, Concord Medical will continue to manage the four centers jointly with Tianjin Kangmeng Radiology's current hospital partner. The centers have been in operation since July 2009. They are equipped with one PET-CT scanner, one IGRT system, one Head Gamma Knife system and one ECT scanner. Prior to the acquisition, Concord Medical had been managing two centers in Hebei province.

“By adding four well-established centers, we are further strengthening Concord Medical's presence in northern China, an important market for cancer treatment. We are confident that this acquisition will contribute to our growth for years to come,” said Dr. Jianyu Yang, director, president and chief executive officer of Concord Medical. “As the industry leader with the largest network of radiotherapy and diagnostic imaging centers in China, Concord Medical should continue to benefit from industry consolidation as Chinese patients increasingly look to established players for advanced, reliable cancer treatment.”

In 2009, Concord Medical opened 16 new centers, bringing the total number of radiotherapy and diagnostic centers in its network to 88 in 36 cities in China, as of Dec. 31, 2009.

Cancer was the leading cause of death in China in 2008, accounting for more than 2 million deaths which represented about 26% of total deaths, according to the Ministry of Health in China. Frost & Sullivan estimates that new cancer cases in China are expected to increase at a compounded annual growth rate of 2.6% from 2008 to 2015, compared with 1.5% in the U.S. However, China has a low penetration of radiotherapy equipment: 0.7 linear accelerators per 1 million population compared with 9.5 linear accelerators per 1 million population in the U.S. in 2008.

Concord Medical operates the largest network of radiotherapy and diagnostic imaging centers in China in terms of revenues and the total number of centers in operation per available statistics. Under long-term arrangements with top-tier hospitals in China, the company provides radiotherapy and diagnostic imaging equipment and manages the daily operations of centers located on its hospital partners' premises. The company also provides ongoing training to doctors and other medical personnel.