American Oriental Bioengineering, Inc., a company that produces and distributes pharmaceutical and nutraceutical products throughout China, has closed the acquisition of Guangxi Lingfeng Pharmaceutical Company Limited (GLP), a pharmaceutical company, organized under the laws of China, specializing in manufacturing and distribution of plant-based medicines in China.
Pursuant to the agreement, AOB acquired 100% ownership of GLP for a total consideration equal to 2.5 times GLP's prior fiscal year revenue. Based on un-audited financial statements consistent with Chinese GAAP, GLP generated revenue of over $10 million USD with positive net income for the year ended December 31, 2005.
AOB expects that the acquisition of GLP will extend AOB's product line into the area of women's health and create synergies between GLP's Jinji Series of drugs aimed to treat gynecological inflammations, such as endometritis, annexitis, and AOB's Cease Enuresis product line for the treatment of bedwetting and nighttime urination, primarily targeted at pregnant and post-pregnant women, stated a release.
GLP has a portfolio of 70 products and operates a distribution network based in Beijing, which extends across China, with a particularly strong presence in Southern China where AOB has yet to establish a significant distribution network. The production facilities of GLP maintain a Good Manufacturing Practices (GMP) certificate as awarded by the Chinese Government and can produce a broad spectrum of delivery specifications, such as capsules, troches, granules, pills, syrups and tinctures.
Tony Liu, Chairman and Chief Executive Officer of AOB said, "GLP is an established and proven manufacturer of plant-based pharmaceuticals with a valuable brand, an extensive distribution network and the opportunity to capitalize on their under-utilized product portfolio. The Jinji Series of gynecological products will contribute to AOB's position in women's health products, which is a large and rapidly growing market in China."
Liu continued, "AOB expects to leverage GLP's proprietary product portfolio to improve the breadth of our product offerings. GLP also delivers strength in distribution in southern China where AOB has historically been under-represented. We are extremely excited about this acquisition and the financial and strategic value it represents. We believe, similar to the HSPL acquisition in 2004, GLP possesses both immediate value and tremendous upside potential for AOB and its shareholders."