NF Energy Saving Corporation Enters into MOU to Acquire Chongqing Guanzan Technology
December 02 2019 - 8:30AM
NF Energy Saving Corporation (NASDAQ: BIMI) (“BIMI” or the
“Company”) today announced that it had entered into a legally
binding Memorandum of Understanding (“MOU”) to acquire Chongqing
Guanzan Technology Co., Ltd. (“Chongqing Guanzan”), a Chinese
medical device distributor, serving more than 200
full-service specialty hospitals in Southwest China, through its
wholly-owned subsidiary Beijing Xin Rong Xin Industrial Development
Co., Ltd.
Pursuant to the MOU, Chongqing Guanzan will, through an internal
restructuring, acquire an 80% controlling interest in its current
affiliate under common control, Chongqing Shude Pharmaceutical Co.,
Ltd (“Shude Pharmaceutical”), within 15 days of the signing of the
MOU. Chongqing Shude is a Chinese medical device distributor
with distribution channels covering 3,000 pharmacies, over 3,000
clinics and 50 private and public hospitals nationwide. The closing
of the Chongqing Guanzan acquisition will be conditioned upon,
among other things, the successful closing of the Shude
Pharmaceutical acquisition. Upon completion of the Chongqing
Guanzan acquisition for which no assurance can be provided,
Chongqing Guanzan and Shude Pharmaceutical are expected to share
their distribution channels with BIMI and assist BIMI’s subsidiary
Boqi Zhengji Pharmacy Chain Co., Ltd. with its retail store
expansion and membership development in Southwest China. BIMI
intends that Chongqing Guanzan will operate as a wholly-owned
subsidiary led by its existing management team.
The MOU provides an exclusivity period of 12 months, during
which time Chongqing Guanzan may not engage in discussions or enter
into an agreement for the purpose of its sale or acquisition by a
third party. If the contemplated acquisition fails due to reasons
attributable to Chongqing Guanzan, Chongqing Guanzan shall pay a
breakup fee in the amount of $150,000 to BIMI. BIMI is not liable
for any breakup fee.
A definitive agreement for the Chongqing Guanzan acquisition is
expected to be entered into within the next 6-12 months. The
agreement will be subject to standard closing conditions and
approvals, including certain regulatory approvals. The
agreement is expected to set forth a purchase price of
approximately RMB 100 million for all of the shares of Chongqing
Guanzan, based on the aggregate annual revenue of Chongqing Guanzan
and Shude Pharmaceutical in the most recent two fiscal years. The
purchase price will be subject to post-closing adjustments based on
performance of Chongqing Guanzan and Shude Pharmaceutical.
About NF Energy Saving Corporation
NF Energy Saving Corporation (NASDAQ: BIMI) is a China-based
provider of integrated energy conservation solutions utilizing
energy-saving equipment, technical services and energy management
re-engineering project operations to provide energy saving services
to clients. In February 2019, the Board of Directors of the Company
was reorganized following efforts led by Mr. Yongquan Bi, the
Company’s new Chairman, with a renewed focus on the health
industry.
About Chongqing Guanzan Technology Co., Ltd.
Chongqing Guanzan Technology Co., Ltd. is a Chinese wholesaler
and retailer of medical devices. The company has business licenses
in China such as Business Permit for Medical Devices, Recordation
Certificate For Business Activities Involving Class II Medical
Devices, etc. Chongqing Guanzan has about ten world-leading medical
device suppliers such as Stryker, GE, Siemens, Philips and Olympus,
and more than 200 customers which are primarily full-service
specialty hospitals in Southwest China. Chongqing Guanzan reported
a revenue of RMB 28 million and profit of RMB 3 million in 2018 and
a revenue of RMB 32 million and RMB 3.5 million in 2019.
About Chongqing Shude Pharmaceutical Co., Ltd.
Found in 1996, Chongqing Shude Pharmaceutical Co., Ltd. is a
pharmaceutical company headquartered in Southwest China that
markets medicines and medical devices. The company has Chinese
business licenses such as Business Permit for Medical Devices, Drug
Wholesale Distribution License, etc. Chongqing Shude currently
works with more than 100 pharmaceutical companies as their
pharmaceutical distributors. Chongqing Shude also has a wide range
of distribution channels including over 3,000 pharmacies, over
3,000 clinics, and over 50 private and public hospitals nationwide.
Shude Pharmaceutical reported a revenue of RMB 52 million and
profit of RMB 4.2 million in 2018 and a revenue of RMB 68 million
and RMB 5.8 million in 2019.
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This communication does not constitute an offer to sell or the
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IR Contact:Dragon Gate Investment Partners
LLCTel: +1(646)-801-2803Email: BIMI@dgipl.com
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