Beijing Med-Pharm Corporation has reached an agreement with Sunstone Pharmaceutical Co., Ltd. to acquire a minority stake in the company. Sunstone is a privately held manufacturer of primarily over-the-counter (OTC) medicines, with operations in Tangshan, Hebei Province, People's Republic of China.
Under the terms of the agreement, Beijing Med-Pharm will assist Sunstone in the formation of a new entity, Sunstone China Ltd., to be registered in the Cayman Islands, which will acquire 100 per cent of the equity interest of Sunstone. Following the completion of the transactions contemplated by the agreement, Beijing Med-Pharm will own up to 49 per cent of the common stock of Sunstone China Ltd. Because Sunstone is privately owned, the transaction does not require the approval of the Chinese central government and is expected to close in the third quarter of 2007.
The closing of the transactions contemplated by the agreement are subject to various conditions, including negotiation of definitive documentation regarding Sunstone China Ltd., satisfactory completion of due diligence by Beijing Med-Pharm and the issuance by Sunstone China Ltd. of audited financial statements.
"This acquisition builds on our business strategy and extends our reach in China in several important ways," says David Gao, CEO of Beijing Med-Pharm. "There are multiple synergies between our product lines in women's health and paediatrics and the potential for cross promotion by our sales teams in hospitals and Sunstone's product lines in the increasingly important retail channel. Sunstone also brings us manufacturing and packaging capabilities that may provide significant efficiencies for producing our own licensed products for the Chinese market. Even before these opportunities are realized, we believe Beijing Med-Pharm will benefit from the growing earnings contributed by this profitable enterprise."
Beijing Med-Pharm is a pharmaceutical marketing and distribution company that is building a proprietary portfolio of high-value branded pharmaceutical products in China and pursuing partnerships with other companies seeking to enter the Chinese pharmaceuticals market.