China Biologic Products Completes Acquisition of 90% Controlling Interest in Chongqing Dalin Biologic Technologies Co., Ltd.
April 17 2009 - 8:00AM
PR Newswire (US)
Acquisition transforms China Biologic into Largest Non-state-owned
Producer of Plasma-based Biopharmaceuticals in China TAIAN CITY,
China, April 17 /PRNewswire-Asia-FirstCall/ -- China Biologic
Products, Inc. (OTC:CBPO) (BULLETIN BOARD: CBPO) ("China Biologic"
or the "Company"), one of the leading plasma-based
biopharmaceutical companies in the People's Republic of China
("PRC"), announced that it has completed the third installment
payment towards the acquisition of a 90% equity interest in
Chongqing Dalin Biologic Technologies Co., Ltd. ("Dalin") for a
total consideration of RMB 194,400,000 (approximately $28.5
million), in accordance with the terms of an equity transfer
agreement with the Dalin shareholders, and is now entitled to all
the rights and privileges of a 90% shareholder in Dalin and in
Dalin's 54% majority-owned operating subsidiary, Qianfeng
Biological Products Co., Ltd. ("Qianfeng"), one of the largest
plasma-based biopharmaceutical companies in China, located in
Guiyang, Guizhou Province. This installment represents the
Company's payment of an aggregate 90% of the total purchase price,
and according to the equity transfer agreement, as amended, Logic
Holding (Hong Kong) Limited ("Logic Holding"), the Company's
wholly-owned subsidiary, is now entitled to all the rights and
privileges of a 90% shareholder in Dalin, including the right to
receive its pro rata share of 54% of the profits generated by
Qianfeng, as of January 1, 2009, subject to a possible dilution to
as low as 41.3%, if a dissenting Qianfeng shareholder prevails in a
pre-existing suit to obtain additional equity interests in
Qianfeng. On March 26, 2009, Dalin received a certificate of
approval from the municipal government in Chongqing for the
establishment of a Taiwan, Hong Kong, Macao and Overseas Chinese
invested enterprise in China, which allows Dalin to operate as a
Sino-foreign joint venture; and on April 10, 2009, Dalin, as a
Sino-foreign joint venture, received business licenses from the
Chongqing City Administration for Industry and Commerce ("AIC"), to
operate for 30 years. Expected benefits of the acquisition include:
-- Increased plasma collection to almost double current levels and
significant increase in production capacity -- Significant increase
in commercial scale and expansion into Guizhou Province --
Opportunity for synergies through leveraging China Biologic's
existing sales and administrative infrastructure, as well as
consolidating research and development efforts -- Opportunity to
increase prices for Qianfeng's product line through China
Biologic's strong brand name and higher value product positioning
-- Use of Qianfeng's technological know-how to achieve higher
yields per unit of plasma input and raise overall efficiencies "We
are extremely pleased to have finalized this transaction that has
transformed our company into the largest non-state-owned producer
of plasma- based biopharmaceutical products in China," said Mr.
Chao Ming Zhao, CEO of China Biologic Products. "Based on our
analysis of data published by the PRC National Institute for the
Control of Pharmaceutical and Biological Products (NICPBP), we now
have more plasma collection stations, collect a higher volume of
plasma, and produce more plasma-based products than any other
non-state- owned biopharmaceutical company in China. We believe
that our increased access to a greater supply of plasma will
provide us with a significant competitive advantage, especially in
light of the limited supply of plasma sources in China." Qianfeng
is one of the largest plasma-based biopharmaceutical companies in
China and the only operating manufacturer in Guizhou Province. With
a population of 39 million, Guizhou Province has historically
produced the highest volumes of plasma collection in China, due to
a higher proportion of its population willing to engage in the
collection process. Guizhou Province has a total of 19 plasma
collection stations in operation, collecting approximately 1200
tons of plasma supply every year. Qianfeng owns 7 of these plasma
collection stations, of which 6 are currently in operation and
collecting approximately 250 tons of plasma supply per year, with
annual production capacity of 400 tons. The Company plans to
re-open the 7th plasma collection station before the end of this
year. The Company also plans to introduce the use of more advanced
collection techniques at these stations, thereby improving yields
and generating additional plasma supply. Qianfeng is in compliance
with Good Manufacturing Practices standards, and has been approved
by the PRC's State Food and Drug Administration to produce six
types of plasma-based products including Human Albumin, Human
Immunoglobulin, Human Intravenous Immunoglobulin, Human Hepatitis B
Immunoglobulin, Human Tetanus Immunoglobulin and Human Rabies
Immune Globulin. Based on management's analysis of NICPBP data,
during 2008 Qianfeng held approximately 7.4% market share in China,
as compared to the Company's 6.9%, which would result in a combined
market share of approximately 14.3%, and the top 6 largest
plasma-based biopharmaceutical companies in China, including
Qianfeng and the Company, had a total market share of approximately
47.8%. "We have already begun the process of integrating our
Huitian and Dalin acquisitions and we see significant opportunities
for synergies and economies of scale," Mr. Zhao further commented.
"Moreover, we were pleased to have structured these transactions to
be the most accretive to our shareholders." The Company is
obligated to pay the remaining 10% of the total purchase price, on
or before April 9, 2010, one year from the date on which the local
AIC approved the registration of the equity transfer. About China
Biologic Products, Inc. Through its indirect majority-owned
subsidiary, Shandong Taibang Biological Products Co. Ltd., China
Biologic Products, Inc. (the "Company"), is principally engaged in
the research, development, production, manufacturing and sale of
plasma-based biopharmaceutical products to hospitals and other
health care facilities in China. The Company's human albumin
products are mainly used to increase blood volume and its
immunoglobulin products are used for the treatment and prevention
of diseases. Safe Harbor Statement This release may contain certain
"forward-looking statements" relating to the business of China
Biologic Products, Inc. and its subsidiary companies. All
statements, other than statements of historical fact included
herein are "forward-looking statements," including statements
regarding: the impact of the acquisition of Chongqing Dalin
Biologic Technologies Co., Ltd. on the Company's production output
and on its ability to compete with other plasma- based
biopharmaceutical companies in China; the ability of the Company to
achieve its commercial objectives; the business strategy, plans and
objectives of the Company and its subsidiaries; statements about
the Company's future revenues and earnings; and any other
statements of non-historical information. These forward-looking
statements are often identified by the use of forward- looking
terminology such as "believes," "expects" or similar expressions,
involve known and unknown risks and uncertainties. Although the
Company believes that the expectations reflected in these
forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Investors should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. The Company's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in the Company's periodic reports that are filed with the
Securities and Exchange Commission and available on its website
(http://www.sec.gov/). All forward-looking statements attributable
to the Company or persons acting on its behalf are expressly
qualified in their entirety by these factors. Other than as
required under the securities laws, the Company does not assume a
duty to update these forward- looking statements. For more
information, please contact: Company Contact: Mr. Y. Tristan Kuo
CFO China Biologic Products, Inc. Tel: +86-538-6202206 Email: Web:
http://www.chinabiologic.com/ Investor Relations Contact: Mr.
Crocker Coulson, President CCG Investor Relations Tel:
+1-646-213-1915 (NY office) or Mr. Gary Chin Tel: +1-646-213-1909
Email: Web: http://www.ccgirasia.com/ DATASOURCE: China Biologic
Products, Inc. CONTACT: Company Contact: Mr. Y. Tristan Kuo, CFO of
China Biologic Products, Inc., +86-538-6202206, or ; Investor
Relations Contact: Mr. Crocker Coulson, President of CCG Investor
Relations, +1-646-213-1915 (NY office) or Mr. Gary Chin,
+1-646-213-1909, or Web site: http://www.chinabiologic.com/
http://www.ccgirasia.com/
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