American Oriental to buy Guangxi Boke

American Oriental Bioengineering, a USA-based manufacturer and distributor of plant-based pharmaceutical and nutraceutical products, has signed a legally-binding letter of intent to acquire Guangxi Boke Pharmaceutical, a privately-owned Chinese plant-based health care company, in a transaction valued at around $40.0 million. The company anticipates all of the consideration for the acquisition will be made in cash, will be accretive to its business upon closing and expects the deal to complete by the end of the third quarter.

Boke is located in the city of Nanning in the Guangxi province of China and was founded in 1995. It manufactures and distributes plant-based pharmaceutical, nutraceutical and personal care products, marketed primarily in China, with the majority of its products sold over-the-counter. The company's major revenue generating product line alleviates nasal congestion and provides sinus relief, and is available in spray, tablet, capsule and granule formulations.

In 2006, Boke generated revenues of about 91.0 million renminbi ($12.0 million) and was profitable. The firm's facility in Nanning is a Good Manufacturing Practices-certified production plant. The company has a sales force that exceeds 600 individuals and an expansive distribution network of primarily pharmacies throughout China. American Oriental believes that a portion of Boke's distribution network can expand its total presence in China.