NF Energy Skyrockets 29% on Acquisition of Hospital Equipment Retailer
The acquisition of Chongqing Guanzan is expected to close within six to 12 months and is worth 100 million yuan.
NF Energy Saving Corp. (Nasdaq: BIMI) sent its stock up nearly 29% on Monday following news of a deal to acquire Chongqing Guanzan Technology Co. Ltd., a medical device retailer in Southwest China.
NF Energy, which provides energy conservation solutions and equipment, said in a statement today that the acquisition is expected to close within six to 12 months for a purchase price of 100 million yuan. That's based on the aggregate annual revenue of Chongqing Guanzan and its subsidiary Chongqing Shude Pharmaceutical Co. Ltd. in the previous two fiscal years, the report said.
"Upon completion of the Chongqing Guanzan acquisition for which no assurance can be provided, Chongqing Guanzan and Shude Pharmaceutical are expected to share their distribution channels with BIMI and assist BIMI's subsidiary Boqi Zhengji Pharmacy Chain Co., Ltd. with its retail store expansion and membership development in Southwest China. BIMI intends that Chongqing Guanzan will operate as a wholly-owned subsidiary led by its existing management team," NF said in the statement.
The announcement sent NF Energy's American depositary shares to $3.39 apiece in New York, that's 76 cents above Friday's close.
With more than 200 customers, Chongqing Guanzan operates through affiliates including Chongqing Shude and Beijing Xin Rong Xin Industrial Development Co. Ltd., according to NF's statement. Chongqing Shude reportedly sells to 3,000 pharmacies, more than 3,000 clinics and 50 private and public hospitals across China.
In October, NF announced it has signed a partnership agreement with Chongqing Shude to build a joint membership system and help sustain revenue growth in Southwest China.
For the three months through September, NF reported revenue of $208,402, down 81% year-over-year. Net loss widened to $547,700, or 7 cents per ADS, compared with $314,900, or 4 cents per ADS, a year ago.