Hedge fund nears deal for medical equipment firm

Avenue Capital, a major hedge fund, is in the final stages of talks to buy a Chinese medical equipment company backed by a unit of Citigroup in a deal worth over $100 million, sources familiar with the situation said Tuesday.

The exclusive talks for Shenzhen-based Landwind between Avenue Capital, one of the world's largest hedge funds, and Citi Venture Capital International (CVCI) came after Bain Capital and other private equity funds dropped their bids, said the sources.

A deal for Landwind would mark a rare occasion whereby a hedge fund outbids a private equity firm for control of a company. Hedge funds such as Avenue, run by billionaire Marc Lasry, have built up their presence in Asia in the last few years, participating in more and more private equity-style deals.

No agreement has been signed yet and the talks between Avenue Capital, which has about $18 billion assets under management, and CVCI could collapse if they are unable to agree on specific financial details, said the sources.

If successful, it would become the biggest investment for Avenue Capital in China. The New York-based fund previously made smaller co-investments with other funds in China in the past few years.

CVCI, an investment arm of Citigroup, bought an nearly 70 percent stake in Landwind, a diagnostic imaging equipment distributor and manufacturer, for over $80 million in 2007, when the Chinese company decided to delist from the Singapore market, according to Singapore media reports.

The sources declined to be identified as the bidding process is confidential. Landwind and CVCI declined to comment. Avenue Capital was not available for comment.

Reuters

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