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Huge Leaf to sell unit
Posted on Friday, 11 August 2017 11:19
Zhejiang Huge Leaf is offloading its subsidiary Huzhou Xinaote Pharmaceutical & Chemical (Xinaote) for CNY 57.10 million (USD 8.56 million).
The two individual buyers are Chen Yongming and Li Qiugen, who will own 45.0 per cent and 55.0 per cent stakes in the target, respectively.
Founded in 1998, Xinaote manufactures pharmaceutical intermediates for sulphonamide and veterinary drugs, as well as plastic stabilisers used in the production of polyvinyl chloride and other packaging materials.
Besides having a strong presence domestically, the Huzhou, China-based firm also exports to countries in Europe, the Americas and Southeast Asia.
Listed on the Shanghai Stock Exchange, the seller is a producer of veterinary drugs and agricultural pesticides previously known as Zhejiang Shenghua Biok Biology.
Huge Leaf posted revenue of CNY 1.01 billion in the 12 months ended 31st December 2016, down 0.5 per cent from the previous year.
Mainly driven by the performances of its associate companies Qingdao Yebio Bioengineering and Caitong Fund Management, net profit for the period totalled CNY 235.61 million, compared to CNY 139.88 million in 2015.
This is not Huge Leaf’s first disposal this year as it announced in January it was offloading its loss-making pesticide and veterinary medicine production unit Inner Mongolia Biok Biological to Zhejiang Yongcheng Yingfu Asset Management in a cash deal worth CNY 59.76 million.
Last month, the seller also agreed to shed a 99.0 per cent stake in zirconium products maker Zhejiang Gaogu Technology, another one of its businesses, to Imerys Fused Minerals Yingkou for CNY 55.55 million.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 448 announced or completed deals targeting Chinese chemical manufacturers since the beginning of 2017, with the largest being Yunnan Baiyao Holdings’ CNY 39.57 billion acquisition of the remaining 58.5 per cent stake in Yunnan Baiyao Group.
© Zephus Ltd