Nu Skin Enterprises Inc. is hoping to accelerate its growth in China with the help of a new, $210 million investment.
The investment is coming from Ping An ZQ China Growth Opportunity Ltd., a firm made up of invested led by Ping An of China Securities (Hong Kong) Co. Ltd., a financial services firm, and other investors affiliated with ZQ Capital Ltd, an investment group. The company’s shares were up about 4.9 percent after the announcement, trading at $45.59 midmorning.
“Ping An and ZQ Capital bring significant local market knowledge and valuable expertise that we believe will positively impact our long-term growth opportunities in this important region,” said Nu Skin chief executive officer Truman Hunt in a statement. “We plan to use the proceeds for repurchasing common stock throughout the remainder of the year and investing in our China operations,” said Nu Skin chief financial officer Ritch Wood in a statement.
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The investment news comes after the sellout of Nu Skin’s AgeLoc Me skin-care system in China. “Based in part of this success, we currently anticipate delivering second-quarter revenue at the high end of, or slightly above, our previous guidance of $560 to $580 million,” Wood said.
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Greater China makes up the largest segment of the company’s sales, and brought in $158.7 million in the first quarter, Nu Skin reported. The company previously said it planned to launch AgeLoc as a limited-time offer this summer, with a full-scale China launch scheduled in the fourth quarter.
Ping An ZQ is buying $210 million in 4.75 percent, four-year convertible senior notes with an initial conversion price of $46.50 per share. Nu Skin expects to sell the notes within five business days. Simpson Thacher & Bartlett LLP provided legal advice to Nu Skin on the deal; Paul Hastings LLP advised Pin An ZQ, and MagStone Law LLP was ZQ’s legal adviser.
The Provo, Utah-based business develops skin-care products under the Nu Skin and AgeLoc brands, plus antiaging supplements. The company also has hair-care, body-care, oral-care sun-care and cosmetics products.