GNC Holdings, Inc. (NYSE: GNC) announced it has reached an agreement regarding a strategic partnership and China joint venture agreement with Harbin Pharmaceutical Group Holding Co., Ltd , a leading pharmaceutical company in China. Under the terms of the agreement Hayao will invest approximately $300 million in GNC, becoming the single largest shareholder in GNC (on an as converted basis). In addition, GNC and Hayao have agreed to form a joint venture for the manufacturing, marketing, sale and distribution of GNC-branded products in China, leveraging the synergies between Hayao and GNC in the fast growing Chinese market. CITIC Capital Holdings Limited ("CITIC Capital"), as a major shareholder of Hayao, is supportive of the transaction.

GNC also announced plans to amend certain terms and extend the maturity date of its existing term loan facility due March 2019. The Company is seeking to extend the maturity date of the facility by two years, to March 2021. Upon effectiveness of the amendment, the maturity date of the term loans held by lenders consenting to the amendment will be extended by two years, the Company's existing Revolving Credit Facility will be cancelled and GNC will enter into a New $100 million ABL Revolver. The Company will also issue a $275 million ABL Term Loan as part of the maturity extension. GNC has the been in discussions with its largest term loan lenders who have indicated their support for the extension until March 2021 and to permit the Company to enter into a new asset based credit facility concurrently with the closing of the proposed amendment and extension. As noted, the Hayao transaction is conditioned upon the successful completion of these negotiations.

"Today's announcements represent important and exciting steps in our efforts to optimize our capital structure and build on our recent momentum as we position GNC to drive growth, improve financial performance and enhance long-term shareholder value," said Ken Martindale, GNC chief executive officer. "Hayao's investment in GNC is a testament to the strength of our brand and the tremendous global opportunity ahead, including in China. By partnering with Hayao and pursuing plans to amend and extend our term loan facility, we enhance our capital structure and financial flexibility and establish a strong platform for growth in the Chinese market.

"As a recognized leader in China, Hayao is an ideal partner as we look to leverage the strength of the GNC brand and capitalize on the demand for nutritional supplements in China. Hayao's strong distribution network and regulatory, operational and manufacturing expertise will enhance our ability to expand our local product assortment. We are confident this partnership will provide us with the expertise to navigate the competitive Chinese landscape and rapidly expand our brand in China."

Zhang Zhenping, Chairman of Hayao, commented, "GNC is one of the most recognized health & wellness brands globally. We are excited about the opportunity to partner with Ken and his leadership team to drive long-term value creation in all markets in which Hayao and GNC operate. In China we are confident that we can leverage Hayao's leadership to accelerate the Company's growth and expansion and deliver GNC products and solutions to millions."

Details of Equity Investment

Under the terms of the agreement, Hayao will invest approximately $300 million in GNC in the form of newly issued convertible perpetual preferred shares with a conversion price of $5.35 and a 6.5% annual coupon payable in cash or in kind. The investment is expected to be used by GNC to, among other things, repay outstanding debt and for general corporate purposes, further enhancing GNC's capital position.

The transaction is expected to close in the second half of 2018, subject to regulatory approvals in the United States and China, GNC shareholder approval, successful completion of the amendment and extension of the Company's term loan facility due March 2019, entry into definitive agreements regarding the joint venture and other customary closing conditions. Following the closing, Hayao will own approximately 40% of GNC on an as converted basis.

In connection with the investment, the GNC board will be expanded to 11 members including five members from GNC, five members from Hayao and Mr. Martindale.

Details of China Joint Venture

China is the largest international market for supplements and GNC is one of the most recognized brands by consumers in the market. As a leading player in China, Hayao provides established networks and relationships in the market which will support GNC's efforts to expand in China, including the ability to accelerate product introduction by leveraging existing "Blue Hat" registrations required for sales in China. Hayao will provide GNC with access to a leading pharmaceutical distribution network in China as well as expertise in operational and manufacturing which will serve as critical resources as GNC works to expand its reach in China.

Advisors

Goldman Sachs & Co. is acting as financial advisor, and Latham & Watkins LLP is acting as legal advisor to GNC. Morgan Stanley & Co. LLC is acting as financial advisor to Hayao. PingAn Securities is acting as PRC financial advisor to Hayao. Junhe Law is acting as PRC legal adviser to Hayao. Ropes & Gray LLP is acting as legal advisor to Hayao on matters concerning US Law.

About GNC

GNC Holdings, Inc. (NYSE: GNC) - Headquartered in Pittsburgh, PA - is a leading global specialty health, wellness and performance retailer.

GNC connects customers to their best selves by offering a premium assortment of heath, wellness and performance products, including protein, performance supplements, weight management supplements, vitamins, herbs and greens, wellness supplements, health and beauty, food and drink and other general merchandise. This assortment features proprietary GNC and nationally recognized third-party brands.

GNC's diversified, multi-channel business model generates revenue from product sales through company-owned retail stores, domestic and international franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships. As of December 31, 2017, GNC had approximately 9,000 locations, of which approximately 6,700 retail locations are in the United States (including approximately 2,400 Rite Aid franchise store-within-a-store locations) and franchise operations in approximately 50 countries.

About Harbin Pharmaceutical Group Holding Co., Ltd.

Harbin Pharmaceutical Group Holding Co., Ltd. – Headquartered in Harbin City Heilongjiang Province, China – is one of the leading pharma and VMS companies in China.

Hayao has a broad portfolio of OTC (Over-The-Counter), Rx (prescription) and VMS products, and is also engaged in pharma distribution and retail pharmacy businesses. Hayao has many National renowned brands that have very high consumer awareness including "San Jing", and command leading market share in mineral supplements category.

Hayao owns 2 listed subsidiaries, including Harbin Pharmaceutical Group Co., Ltd. (SHSE: 600664) focusing on OTC, Rx and VMS business, and HPGC Renmintongtai Pharmaceutical Corporation (SHSE: 600829) focusing on distribution and retail pharmacy business.

Hayao has access to an extensive distribution and retailing network by directly operating more than 300 chain retail pharmacies and collaboration with around 800 drug and VMS distributors to build Nation-wide coverage.

About CITIC Capital

Founded in 2002, CITIC Capital Holdings Limited is an alternative investment management and advisory company. The firm manages over $22 billion of capital across 100 funds and investment products through its multiple asset class platform covering private equity, real estate, structured investment & finance, and asset management. CITIC Capital has over 130 portfolio companies that span 11 sectors and employ over 820,000 people around the world.