In the end of October, China Medicine Corporation announced that through its wholly-owned Chinese subsidiary Konzern Pharmaceuticals, it has signed an equity transfer agreement to acquire 100 per cent equity interest in the British Virgin Islands corporation Sinoform Limited, for a cash payment of US $8.3mln and the assumption of US$13.2mln in debt . The BVI company purchased by China Medicine is the sole shareholder of Guangzhou LifeTech Pharmaceuticals Co. Ltd. , which is a developer, manufacturer and marketer of pharmaceuticals products, headquartered in Guangzhou.
The deal is expected to close on or before December 31, 2009. Upon closing the acquisition, China Medicine will obtain Life Tech’s assets, appraised at US$25.5mln. . Top-selling drug of acquired BVI company’s subsidiary LifeTech, Houerhuan Xiaoyan Capsules, is projected to account for 66% of LifeTech's annual sales in 2009 and has a gross margin of 60-70%.
Under the terms of the Transfer Agreement, China Medicine will pay approximately US$0.549mln of the cash purchase price and make a repayment of US$7.3mln of Life Tech’s debt upon the execution of the Agreement; the Chinese company will pay additional US$3.7mln upon the approval of the transaction by the foreign trade bureau. The remaining balance of the purchase price will be made on or before June 30, 2010.
Guangzhou LifeTech Pharmaceuticals Co. Ltd. is a developer and manufacturer of pharmaceutical products with focus on natural-source vascular, anti-inflammatory, women's health and other TCM and Western medicine products. China Medicine Corporation is a company involved in development and distribution of pharmaceuticals and traditional Chinese medicines, nutritional and dietary supplements, medical devices and medical formulations, nutritional and dietary supplements.
