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news.American Oriental Bioengineering has signed a letter of intent to acquire Changchun Xinan Pharmaceutical Group Company Limited, a privately-owned plant based pharmaceutical company, for $30 million.
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Pursuant to the terms of the letter of intent, AOB has 90 days to enter into a definitive purchase agreement and close the transaction with CCXA. The company anticipates the consideration for the acquisition will be all in cash.
CCXA is located in the Jilin province and owns a portfolio of plant based products, including both prescription and over-the-counter pharmaceutical products, marketed in China. Among CCXA's assets is a set of women's health products which the company believes are complementary to its current product portfolio and GMP certified manufacturing facilities which can produce different product formulations including capsules and injectables. Based on the unaudited financial statements, CCXA was profitable for its 2006 fiscal year.
AOB believes that this transaction, if completed, is consistent with its acquisition strategy to acquire companies that are accretive to its operations within one year of closing and provides a strategic fit with the company's existing business. This transaction is subject to the parties entering into a definitive agreement, including a price that will be subject to customary closing conditions.