China Valves Technology, Inc. signed an agreement to sell stock to an accredited investor, issuing 333,334 shares of common stock at a price of $9.00 per share. The company will get proceeds of $3.0 million before expenses.
China Valves Technology, Inc. also issued warrants to the investor that allows the holder to purchase 50,000 shares of common stock at an exercise price of $9.00 per share. The warrants are only exercisable for 30 days after the issuance. Both the common stock and warrants issuance are expected to close on December 31, 2009. China Valves Technology, Inc. said the proceeds would be used for a potential acquisition and for working capital purposes.
Siping Fang, the CEO of China Valves Technology, Inc., said, “With the $3 million raised in this transaction and our current cash balance, we anticipate to further consolidate the valve industry in China through the acquisition of an identified target. The dilution of common shares is minimized, and we expect to achieve our make good target in net income and earnings per share for 2009.”
China Valves Technology, Inc. manufactures and sells metal valves for use in many different applications including metallurgy, electrical, petroleum, chemical, water and gas. The company has three wholly owned subsidiaries: Zhengzhou Zhengdie Valve Co, Ltd., Henan Kaifeng High Pressure Valve Co., Ltd., and the Tai Zhou Tai De Valve Co., Ltd.