Huada Zhizao plans to sell 100% equity of CGI for approximately $50 million

Beijing Business News (Reporter Ding Ning) reported that on the evening of February 23, BGI Group (688114) announced that its wholly owned subsidiary MGI Tech R&D HONG KONG CO., LIMITED (hereinafter referred to as “MGI R&D HK”) signed a Stock Purchase Agreement with Swiss Rockets AG (hereinafter referred to as “Swiss Rockets”). The agreement proposes to sell 100% equity of its wholly owned subsidiary Complete Genomics, Inc. (hereinafter referred to as “CGI”), after stripping related assets and liabilities, for approximately $50 million.

In addition, prior to the transaction closing, CGI and the company’s subsidiary MGI US LLC signed a Reverse License Agreement, whereby CGI will permanently, freely, and irrevocably license to MGI US LLC 205 patents, trade secrets, and trademarks. These patents cover library construction, including dual-adapter libraries and stLFR single-tube long fragment read technologies; sequencing methods, including DNBSEQ-DNA nanoball array and dual-color fluorescence sequencing; sequencing hardware, including control systems, fluid systems, and optical systems; sequencing software, including base recognition, data analysis, and image alignment; and sequencing reagents, mainly related to reagent loading technologies.

BGI Group stated that this transaction is expected to bring significant direct benefits and improve ongoing cash flow for the company. Through this equity transfer, the company will receive approximately $50 million in consideration. At the same time, the transaction will divest a business unit that has been operating at a loss in recent years. After the transaction is completed, the annual losses attributable to this business unit can be substantially reduced, thereby materially enhancing the company’s overall profitability and operational efficiency. Furthermore, through the licensing arrangement in this transaction, the company will receive tiered revenue sharing based on the future global net sales of the licensed products. This arrangement will provide the company with a stable and sustainable long-term cash flow, strengthening its financial resilience.