On September 18, Micro-Tech (NL) International B.V. announced that the company intends to use its own funds of no more than 36.72 million euros (equivalent to approximately 289 million yuan) to purchase 51% of the shares of Creo Medical S.L.U. (hereinafter referred to as "CME") held by CreoMedical Group plc (hereinafter referred to as "Creo") through its wholly-owned subsidiary Micro-Tech (NL) International B.V. After the completion of this transaction, CME will become a holding subsidiary of the company.

The announcement shows that Creo is a medical device company headquartered in the UK and listed on the London Stock Exchange (stock code: CREO). Creo focuses on the development and commercialization of minimally invasive surgical equipment in the field of surgical endoscopy. Its main product is CROMA, an electrosurgical platform that can provide microwaves and bipolar radiofrequency for local cutting through a single accessory port, providing doctors with simplified and controllable surgical solutions. The target company is the main source of income and profit for Creo. As of September 17, 2024, Creo's market value is 103.92 million pounds (about 123.02 million euros), with revenues of 30.67 million euros and 35.48 million euros in 2022 and 2023, respectively, and net profits of -30.30 million euros and -25 million euros, respectively. According to the financial due diligence report and tax due diligence report issued by Deloitte, the target company's revenues in the same period were 28.91 million euros and 31.94 million euros, and net profits were 1.726 million euros and 3.468 million euros, respectively, accounting for more than 90% of Creo's revenue.

CME is a wholly-owned subsidiary of Creo and a channel company for the sale of medical device products. Its distribution products include Creo's self-developed products and medical device products in the fields of digestion, urology, respiratory, and disposable endoscopes produced by other related medical device companies. Among them, endoscopic consumables and disposable endoscopes account for nearly 70% of the company's revenue in 2023.

According to reports, CME's main business is concentrated in Western Europe, covering the United Kingdom, Spain, France, Germany, Belgium, Luxembourg and other countries. France is the region with the highest revenue share of the company. In 2023, the revenue generated by this region accounts for about 30% of the company's revenue, followed by the United Kingdom, Belgium, Spain and Germany. The four regions account for about 60% in total, and other regions account for about 10%. CME's main customers are medical institutions, including public hospitals, private hospitals and clinics. According to the due diligence of CME, the company covers nearly 5,000 medical institution customers in the top five countries in terms of sales revenue. In summary, CME sells a variety of products, covers a wide range of channels, and has a rich customer structure and variety. Nanwei Medical said that after the completion of this transaction, the target company will become a holding subsidiary of the company and be included in the scope of the company's consolidated financial statements. The target company has cooperated with the company in the past and has maintained a good relationship, but the target company currently has no company products on sale. Overall, the target company's existing sales channels and products are highly complementary to the company, and the two parties have a good basis for cooperation, which is conducive to the common development of both parties. This transaction will help the company improve its product sales capabilities in Europe, accelerate overseas expansion, and quickly increase the company's product market share in Europe. At the same time, the company can help the target company achieve sustained growth by introducing more product categories and new products that the target company has not yet sold. Considering the characteristics of both parties, the merger is in line with the company's long-term development strategy and will help improve the company's international network layout, thereby achieving the goal of long-term returns to the company and its shareholders.

According to foreign media reports, Creo Medical S.L.U. ("Creo Europe"), the target of the acquisition by Nanwei Medical, was formerly Albyn Medical S.L. and was acquired by Creo Medical Group plc in 2020 as a way to expand its business platform in Europe. Today, Creo Europe manufactures and distributes professional gastroenterology, urology and endoscopy products for healthcare providers across Europe. Its product range includes Creo's own manufacturing products, Creo brand (third-party manufacturing) products and third-party brand (i.e. distribution) products, which are mainly sold in major European markets.

Luis Collantes, Managing Director of Creo Europe, will continue to manage and operate the business with support from Creo and Micro-Tech. Along with Nanwei Medical, Creo will retain multiple seats on the Creo Europe Board of Directors. Creo and Nanwei Medical have agreed to explore co-branding and registration strategies to bring certain core Creo products to the large Chinese market. "Nanwei Medical is not only a leading endoscopic device company in China, but also a significant global brand in the gastrointestinal endoscopy market. This sale is an excellent strategic partnership for us and will support our continued commercial growth in the Asia Pacific region through product registration and co-branding in China," said Craig Gulliford, CEO of Creo. "In addition, Creo Europe will gain access to the broader Nanwei Medical portfolio and a complementary product line under the Creo brand, ensuring confidence in long-term supply to our growing global sales channel. This strategic partnership also enables a global leader in our market to gain access to our advanced energy platform in China and opens up exciting co-development opportunities as we seek to be at the forefront of advanced energy in the gastrointestinal endoscopy and minimally invasive surgery markets. Since the acquisition and subsequent integration, Creo Europe has performed strongly, expanding its product portfolio and strengthening the Creo product brand, now with established sales in the U.S. and Latin American markets. We are pleased to retain a significant interest in Creo Europe post-transaction while generating a return on our initial investment and strengthening our balance sheet to invest in our core strategy." "The potential of this partnership is to be realized through Creo Medical Europe It is really exciting to accelerate growth and achieve a unified brand and product strategy across our global commercial operations outside of Europe, which will enable us to enhance our customers' surgical repertoire and further strengthen the clinical benefits we can provide to patients. "As China's leading manufacturer of endoscopic diagnostic and therapeutic equipment, Nanwei Medical has been continuously expanding its overseas sales channels and seeking valuable partnerships for innovative products," said Long Xiaohui, Chairman of Nanwei Medical. Creo's subsidiary Creo Europe is an important medical device distributor in Western Europe, and its sales channels and products are highly complementary to those of Nanwei Medical. After the completion of this acquisition, Nanwei Medical will be able to introduce more products to Creo Europe, enhance Creo's R&D and market expansion efforts, and bring new impetus to the development of both companies. Nanwei Medical, Creo and Creo Europe have a high degree of strategic consistency and synergy, and we also have a common goal - to provide better medical solutions for patients and doctors. This acquisition will benefit all parties and help us achieve our common growth goals. "It is understood that Nanwei Medical has established an internationalization strategy since its early days, driving both domestic and international markets with two wheels. As early as 2015, Nanwei Medical established a wholly-owned subsidiary MTU in the United States, established a marketing team, sold products directly to medical institutions, and assumed the company's distributor responsibilities in the US market. In 2018, the company spent 7.52 million euros to acquire 80% of MTE held by Defang Holdings, and MTE officially became a subsidiary of the company. In 2023, the company continued to expand its direct sales channels by acquiring two channel companies in Portugal and Switzerland.

In terms of performance, Nanwei Medical's overseas achievements are outstanding. In the first half of 2024, the company achieved operating income of 1.334 billion yuan, an increase of 16.28% from 1.147 billion yuan in the same period last year. The operating income increased by 16.28% over the previous period, mainly due to the increase in sales in overseas markets. From a regional perspective, domestic market sales revenue was about 706 million yuan, compared with 694 million yuan in the same period last year, a year-on-year increase of 1.73%; international market sales revenue was about 624 million yuan, compared with 447 million yuan in the same period last year, a year-on-year increase of 39.72%. Among them, MTU (Micro-Tech Endoscopy USA, Inc., a wholly-owned subsidiary of the company, the company's Americas sales region is referred to as MTAm) had a revenue of 280 million yuan, a year-on-year increase of 38.6%; MTE (Micro-Tech Europe GmbH, a wholly-owned subsidiary of the company, the company's Europe, Middle East, Africa sales region is referred to as MTEm) had a revenue of 220 million yuan, a year-on-year increase of 53.9%; Asia-Pacific overseas region revenue was 116 million yuan, a year-on-year increase of 16.4%; Kangyou Medical achieved revenue of 130 million yuan, a year-on-year increase of 19.3%. At present, Nanwei Medical is further consolidating its overseas sales channels. It is reported that its US subsidiary continues to consolidate the reform of the local sales team, and through regional segmentation and optimization of the salary assessment system and other measures, it has achieved a significant increase in profits; set up a European regional headquarters to exercise regional management functions on behalf of the company headquarters, and coordinate business development, market planning, communication and coordination, regional services and other matters in the European region; the newly acquired two channel companies in Portugal and Switzerland have become new tools for business expansion in Europe; set up an Australian representative office to enhance the company's sustainable profitability and comprehensive competitiveness. At the same time, the construction project of Nanwei's Thailand production base has gradually completed production and infrastructure planning, and is scheduled to be put into operation in 2026, aiming to establish a secure global supply chain and further expand the Southeast Asian market. Smart medical device data shows that from the perspective of the development of the entire medical market, due to factors such as medical anti-corruption, the growth of China's domestic medical device market is still slow. In the first half of 2024, the scale of bidding in the domestic medical equipment industry was about 55 billion yuan, a year-on-year decline of about 35%; the scale of bidding in the medical imaging industry (excluding ultrasound in the scope) in the first half of the year was about 19 billion yuan, a year-on-year decline of about 45%, of which the scale of bidding in the medical endoscope industry was about 7 billion yuan, a year-on-year decline of about 40%. In this case, going overseas has become a hot word in the medical device industry, and many companies have opened up a second growth curve overseas. For example, Kaili Medical's overseas sales cover nearly 130 countries or regions. In 2023, Kaili Medical's revenue in the international market reached 939 million yuan, a year-on-year increase of 18.24%, accounting for 44.31% of its total revenue. It is worth mentioning that in 2024, Kaili Medical will continue to adhere to overseas localization in the international market and deepen the key market strategy. By 2026, it plans to add multiple overseas subsidiaries.
Most of Haitai Xinguang's revenue comes from overseas markets. The 2023 annual report shows that Haitai Xinguang's main business overseas revenue is 327 million yuan, with a gross profit margin of 69.99%, while domestic revenue is 141 million yuan, with a gross profit margin of 50.25%; overseas revenue accounts for nearly 70%. Since 2008, Haitai Xinguang has cooperated deeply with Stryker and has become the designer and producer of core components in its new equipment. In response to investors' questions, Haitai Xinguang said that the company in Nevada, USA is currently undergoing an audit by American customers, and after the audit is passed, it can directly undertake endoscope orders from American customers.

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