BMP Sunstone Corporation announced that its wholly-owned subsidiary, Sunstone (Tangshan) Pharmaceutical Co., Ltd. (Sunstone) has signed a non-binding letter of intent to acquire 75 per cent of Zhangjiakou Shengda Pharmaceutical Co., Ltd (Shengda), Zhangjiakou Pharmaceutical Group for up to RMB 30.0 million (approximately $4.4 million).
Terms of the acquisition are not yet finalized, as completion is subject to a number of conditions including finalization of due diligence and definitive documentation. The company intends to use the cash available at Sunstone to fund the acquisition and expects to complete the acquisition by the end of the fourth quarter of 2008. The letter of intent also includes a six month exclusivity clause, a company release stated.
Shengda is a leading manufacturer of paediatric pharmaceuticals, specializing in antibiotic research and development and has approximately 75 product licenses approved by the SFDA in China.
Zhiqiang Han, president and chief operating officer of BMP Sunstone, stated, "We look forward to the partnership with Shengda. While we are not interested in entering the low-end generic antibiotics market, the Shengda products we intend to acquire specifically target the oral paediatrics market. They fit nicely under our GoodBaby brand and also complement our paediatrics franchise in both the OTC and Rx markets. Utilizing our existing sales coverage and nationally-recognized brand, we intend to realize synergies immediately by increasing sales volume and improving sales margins."
Han continued, "Shengda's main products are amoxicillin tablets, capsules and clavulanate potassium compound preparation. These products include some of the most widely prescribed and effective paediatric medicines with dosages and flavours specifically formulated for children's use. We look forward to combining Sunstone's platform in paediatric pharmaceuticals, Shengda's product portfolio and R&D expertise with BMP Sunstone's distribution network into a national-leading platform in paediatrics."
BMP Sunstone Corporation is a specialty pharmaceutical company that is building a proprietary portfolio of branded pharmaceutical and healthcare products in China and is pursuing partnerships with other companies seeking to enter the Chinese pharmaceutical market.