On July 11, Xianle Health (300791.SZ) received a letter of concern from the Shenzhen Stock Exchange.The letter of concern raised a total of 7 questions, mainly focusing on the necessity and rationality of the transaction, whether the seller had already planned the sale of the target company, and the acquisition did not set a performance commitment and performance compensation, etc., and asked Xianle Health to give an explanation.
As early as the evening of July 7, Xianle Health issued a plan to issue stocks to specific objects and acquire 80% equity of Best Formulations. Yuan was used to acquire an 80% stake in Best Formulations Inc. (the target company) in the United States.
Necessity and reasonableness for this transaction
Xianle Health mentioned in the July 7 announcement that as a large domestic contract R&D manufacturer (CDMO) of nutritional and healthy food, and a leading manufacturer of soft capsules and nutritional gummies, the company has long been committed to organic growth through organic growth. And epitaxial mergers and acquisitions have become the leading company in the global nutrition and health food CDMO field.In 2016, the company completed the acquisition of Ayanda, a well-known European softgel contract manufacturer.
The target company is CDMO, a leading nutritional supplement product company in the United States. It has the ability to produce a variety of dosage forms and develop complex formulas in the field of soft capsule products, and has begun to deploy soft candy and personal care products. It has advanced production facilities and an experienced management team. , has accumulated a solid customer base and maintained a stable customer relationship through years of deep cultivation in the US market.
Xianle Health stated in the announcement that after the completion of this transaction, the two parties are expected to give full play to the synergy effect through a series of cooperation such as strategic resource sharing, technology research and development, and business operation integration, and the company will further enhance its popularity and competitiveness in the global market. Expand market share, enhance long-term profitability, and enhance shareholder returns.
However, the Shenzhen Stock Exchange requires a more detailed explanation of the rationality of the acquisition based on the target company's production capacity, research and development, intellectual property rights, and order status.
Shenzhen Stock Exchange is concerned about whether the sale of the target company has already been planned
One of the doubts is the reason why the target company began to transform in 2019, and whether it was designed for this acquisition.The Shenzhen Stock Exchange requires Xianle Health to explain the time and background of the contact with the target company and related personnel, as well as the production and research and development, main products and customers of the target company around 2019.
Another doubt is that before the official closing of the transaction, the seller will spin off VIT Health, a subsidiary of the target company, out of the target company, which will be directly held by the seller.The Shenzhen Stock Exchange requires Xianle Health to explain the financial status, main products, R&D rights, customers, etc. of VIT Health in the past three years, explain the reasons and rationality for the spin-off of VIT Health from the target company, and whether there will be any damage to the target company. Negative Effects.
Shenzhen Stock Exchange expresses concern about acquisitions without performance commitments and performance compensation
The net assets of Xianle Health at the end of 2021 were only 2.545 billion yuan, while the net assets of the target company of this transaction were only US$22.46 million (about 150 million yuan) on the evaluation base date. After multiple rounds of bidding and quotation processes, the transaction was finally determined The price is about 1.211 billion yuan.
It is worth noting that the transaction did not set performance commitments and performance compensation and other related arrangements, and the current disclosure does not involve matters such as goodwill.The Shenzhen Stock Exchange requires Xianle Health to add that there is no performance commitment and performance compensation in light of the acquisition purpose of this transaction, the high valuation of the target company, the payment of the consideration in full at one time, and the possible difficulties in the operation and management of the overseas target company. The reason and reasonableness of the terms.
