Bohai Pharmaceuticals Group, Inc., a Chinese pharmaceuticals company engaged in the production, manufacturing and distribution of modernized herbal products based on Traditional Chinese Medicine (TCM), announced today that it has made the acquisition of a complimentary TCM company in China. The all cash acquisition of 100% of the outstanding shares of Yantai Tianzheng significantly expands Bohai’s standing in the TCM market by adding products, manufacturing and sales capabilities.
The transaction, consisting of four installment payments over 18 months for a total of $35 million, includes a stipulation that Jinghoo 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. Bohai will obtain full ownership of Yantai Tianzheng immediately, with an effective transaction date of July 1, 2011.
Yantai Tianzheng markets five primary products: Fangfengtongsheng Granule; Zhengxintai Capsule; Maitong Granule; Bezoar Antipyrotic Tablet; and Sanqi Shang Tablets. The company’s Fangfengtongsheng Granule, 59% of sales in 2010, is a prescription product on China’s Essential Drug List and qualifies for reimbursement under China’s national health insurance system. Fangfengtongsheng Granule is used to treat fever, headache, constipation, measles and eczema. Zhengxintai Capsule, which accounted for 33% of sales in 2010, is a prescription product on China’s National Drug Reimbursement List (NDRL) and also qualifies for reimbursement under China’s national health insurance system. Zhengxintai Capsule is used to improve kidney function and treat coronary artery disease and angina.
“The acquisition of Yantai Tianzheng marks a major milestone for Bohai. The acquisition expands our product lines and should allow us to leverage our respective sales and distribution channels by introducing new products. Yantai Tianzheng’s current sales network spans over 14 major provinces with products sold in over 1,100 hospitals across China. In addition, Yantai Tianzheng brings excess manufacturing capacity and will allow us to further expand our production. We plan to consolidate and integrate the two companies’ operations, which creates the potential for significant improvement in the operating efficiency of the combined companies. Most importantly, Yantai Tianzheng brings a very attractive lineup of SFDA approved, exclusive and/or protected TCM medicines to Bohai’s product line,.” said Hongwei Qu, Chairman, President and CEO, Bohai Pharmaceuticals, in a press release on Wednesday.
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.
“We are excited to combine our operations with Bohai. Bohai is a proven leader in the TCM marketplace in China, with a strong brand reputation, established distribution channels and first-class manufacturing. We believe that Yantai Tianzheng’s TCM products complement those currently produced and distributed by Bohai and we look forward to leveraging our combined products and expertise,” stated Jiangbo Chi, CEO, Yantai Tianzheng, in the press release.
Source:qualitystocks.net