Jiangbo Pharmaceuticals Inc., a company that engages in the research, development, production, marketing, and sale of pharmaceutical products in China, has announced that Liayang Jiangbo Pharmaceutical Co., Ltd., a limited liability company that is organized in terms of the laws of PRC and is controlled by Jiangbo through contractual agreements, has signed a new Letter of Intent (LOI) with Shandong Xinkangqi Medical Company, a wholesale drug provider in the Shandong Province. The LOI entitles Laiyang Jiangbo to obtain 100% of the outstanding equity of Xinkangqi.
Xinkangqi, which was founded in 2003, is one of the first companies in the Shandong Province that has received the Province’s Good Sales Practice license. Xinkangqi currently employs 180 employees and professionals, while distributing traditional Chinese medicine, antibiotics, biological products, disinfection products, and chemical raw materials that are manufactured by 600+ pharmaceutical companies to retail pharmacies, medical centers, hospitals, and health clinics in the Shandong Province.
Xinkangqi’s net income and unaudited revenue in 2010 has been estimated at approximately $4.4 million and $180 million, respectively. The purchase price for the agreement will be finalized once the due diligence process is complete.
Laiyang Jiangobo has plans to complete a legal, financial, and operational due diligence for Xinkangqi in a period of 3 months, which will include the assessment of Xinkangqi’s intellectual property, assets, liabilities, business operations, organizational structure, and contracts with other parties. Laiyang Jiangbo has also agreed to maintain Xinkangqi’s current employees and management team after the transaction is complete. The Company expects that the new acquisition will close by the end of September of this year.
“We are very pleased to announce the entry into the LOI with Xinkangqi which we believe has a strong presence in Shandong, one of China’s largest provinces with over 94 million inhabitants,” commented Mr. Linxian Jin, CEO of Jiangbo. “Xinkangqi currently distributes many of our products and we anticipate achieving meaningful synergies by vertically integrating our manufacturing operations with Xinkanqi’s distribution business after the transaction is closed. We plan to continue to evaluate strategic uses for our substantial remaining cash balance, including additional acquisitions in the fragmented distribution sector. Among our current operational goals, we plan to build Xinkangqi into one of the largest vertically-integrated wholesale drug distributors in Shandong.”
Jiangbo Pharmaceuticals Inc. focuses on the research, development, production, marketing, and sale of pharmaceutical products in China. It produces western and Chinese herbal-based medical drugs in tablet, capsule, granule, syrup, and electuary forms. The company, which was formerly known as Genesis Pharmaceuticals Enterprises Inc., changed its name to Jiangbo Pharmaceuticals in April of 2009. The company was founded in 2003 and is headquartered in Laiyang City, The People’s Republic of China.
For more information on the Company and its products and future endeavors, visit their company website www.jiangbopharma.com
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