China SXT Pharmaceuticals, Inc. (Nasdaq: SXTC) announced Thursday that it has entered into a non-binding letter of intent to acquire Jiangsu Renji Pharmaceutical Chain Co., Ltd.
Based in Taizhou, Jiangsu province, SXTC develops and sells traditional Chinese medicine (TCM) and health food supplements. The company said it will acquire 70% of the equity interest of Renji Chain in exchange for cash and the company's common shares.
Feng Zhou, the chief executive officer and director of China SXT, stated, "Renji Chain is a pharmaceutical retail chain with national online drug sales license and also the biggest retail chain integrating pharmaceutical marketing and service in Taizhou. Its market share has ranked first in the pharmaceutical retail industry in Taizhou for five consecutive years.”
According to the announcement, Renji Chain’s technical team includes 120 licensed pharmacists and physicians. Since 2015, Renji Chain has established its online flagship stores in Alibaba Tmall, Jingdong health and other online platforms. Renji Chain currently has about 220,000 online registered members.
"China SXT is a specialty pharmaceutical company focusing on the research, development, manufacturing, marketing, and sales of Traditional Chinese Medicine Pieces. It has rich experience in TCMPs operation,” said Wei Zhang, chief executive officer of Renji Chain.
The company said it will integrate the traditional brand of Suxuantang with the new retail model of Renji Chain after the acquisition is completed.
The global market for traditional Chinese medicine treatment market is expected to grow steadily, both during and after Covid-19 subsides. According to Data Bridge Market Research, the market is growing at a CAGR of 12.50% between 2021 and 2028.
Shares of China SXT inched up 2% to $1.06 intraday Thursday.