Boqi International Rises 5% on Deal to Acquire Medical Distributer, Chongqing Guanzan
BOQI has soared in the markets over the last two trading days, hitting a high of $7.40 per ADS today.
The stock in BOQI International Medical Inc. (Nasdaq: BIMI) more than 3% to $5.15 per American depositary share at Monday's close, after announcing that it will close its purchase agreement to acquire a full stake in the Southwest China medical distributer, Chongqing Guanzan Technology Co. Ltd.
Under the agreement, health products provider BOQI will buy Chongqing for approximately $14.3 million, which will be paid in 950,000 common shares, according to the company's statement today. BOQI said it expects the deal to close on or around April 20.
According to the statement, Chongqing Guanzan has 50 hospitals, 130 pharmaceutical companies, and more than 8,000 pharmacies and clinics globally. It also has 10 world-leading medical device suppliers including Stryker, GE, Siemens, Philips and Olympus.
"This is a milestone acquisition which substantially accelerates our pharmacy expansion and member growth in Southwest China. Southwest China has about 200 million people and increasing market demand, which is a key area of our expansion strategy,"Tiewei Song, chief executive officer and president of BOQI said.
He added, "The acquisition enhances our market position in Southwest China by bringing vital distribution channels, a best-in-industry management team, and local media influence. By consolidating new distribution channels, we can increase distribution channel efficiency and ensure supply during the current coronavirus outbreak."
In December, the two parties entered a Memorandum of Understanding (MOU) with similar terms as BOQI announced today. Despite the coronavirus impacting many Chinese listed companies in the U.S., BOQI has achieved significant appreciation over the past two trading days.
Before Friday, BOQI closed as low as $2.71 per ADS last week, but reached a three month high today with its shares hitting $7.40 per ADS.
Headquartered in Shenyang, BOQI was formerly known as NF Energy Saving Corp; the company has transformed from an energy conservation business into a medical and health products provider.
BOQI offers medical, pharmacy and behavioral health plans, chronic disease management services and health information technology products and services.
For the three months through September, BOQI 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.