Bohai Pharmaceuticals Acquires Yantai Tianzheng Pharma for $35 Million
Bohai Pharmaceuticals Group, Inc. recently announced it has consummated a significant acquisition of a complementary Traditional Chinese Medicine (TCM) company in China, Yantai Tianzheng Pharmaceutical Co., Ltd. Like Bohai, Yantai Tianzheng produces, manufactures, and distributes modernized herbal medicines based on TCM in
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Under the terms of a share purchase agreement, Bohai will acquire 100% of the outstanding shares of Yantai Tianzheng from its three shareholders for $35 million in an all cash transaction consisting of four installment payments over 18 months. Notwithstanding the installment payment structure, Bohai will obtain full ownership of Yantai Tianzheng immediately, with an effective transaction date of July 1, 2011. Mr. Jiangbo Chi, Yantai Tianzheng’s majority owner and CEO, will remain with Bohai to oversee the Yantai Tianzheng business. Bohai expects to fund this acquisition from cash on hand, future cash flow, and from third-party debt and/or equity sources. Additional details of the transaction will be available in Bohai’s Form 8-K to be filed with the Securities and Exchange Commission.
Yantai Tianzheng markets five primary products: Fangfengtongsheng Granule; Zhengxintai Capsule; Maitong Granule; Bezoar Antipyrotic Tablet; and Sanqi Shang Tablets. Yantai Tianzheng has annual production capacity of 400 million tablets, 300 million capsules, and 250 million bags of granules respectively, which adds to Bohai’s current capacity of 1,350 million tablets, 370 million capsules, and 30 million bags of granules and other product categories.
Bohai and Yantai Tianzheng have collaborated in the past. In 2008, Bohai granted Yantai Tianzheng a non-exclusive license to market and sell Yantai Tianzheng’s products under the Bohai brand and trademark for five years. No other relationship existed between the two companies prior to the acquisition.
Bohai Pharmaceuticals Group, Inc. is engaged in the production, manufacturing, and distribution of modernized herbal pharmaceuticals based on Traditional Chinese Medicine in
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