(Yicai Global) Feb. 7 -- Xilong Scientific Co. will invest substantial amount of cash to acquire majority equity in a molecular diagnostic technology company to increase its competitiveness in In Vitro Diagnosis, or IVD, and inject new synergy to its medical resources, it said in a statement yesterday.

The Guangzhou-based company has signed an equity transfer agreement with several shareholders of Shandong ACV Biotech Co. to obtain 74 percent equity for CNY431 million (USD68 million), the statement said. The shareholding ratio of the controlling stakeholder, Zhang Guoning, will fall to about 6 percent from 73 percent after the completion of the acquisition.

The total value of the target company has been calculated based on 18 times of the audited after-tax net profit after deducting non-recurring gains and losses of the company in 2017, the statement added. Shandong ACV Biotech is a technology service company dedicated to clinical medicine, molecular diagnostics, genetic testing technology products and high-throughput testing platform. It adopts the business model of product + service to develop reagents in the field of molecular diagnostics and related services, covering the areas of epidemic diseases and food safety risk monitoring, it said.

Molecular technologies are used in the field of genetic testing and patient care. They are known to have revolutionized the field of microbiology, and have transformed medicine, infection control and prevention, patient care and overall hospital operation, experts say.