omniture

China Green Agriculture Announces Strategic Acquisitions

2016-07-08 22:00 2176

XI'AN, China, July 8, 2016 /PRNewswire/ -- China Green Agriculture, Inc. (NYSE: CGA) ("China Green Agriculture", "CGA" or the "Company"), a company that mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its subsidiaries in China, today announced that its wholly-owned subsidiary Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., a company organized under the laws of the People's Republic of China ("Jinong"), as authorized by the board of directors of the Company and Jinong, entered into (i) Strategic Acquisition Agreements (the "SAA"), (ii) Agreements for Convertible Notes (the "ACN"), and (iii) VIE Agreements, with the shareholders of the group of six companies on June 30, 2016.

Transaction Highlight:

  • The strategic acquisitions take the first leap forward to establish a brand new sales segment of agriculture related products, and to transform the company into a platform centered venture.
  • The total purchase price includes $6 million in cash and $8 million in convertible notes.
  • Convertible notes are due in 3 years with an annual fixed rate of 3%.
  • The effective conversion price of the convertible notes will be no less than $5.00 per share*.
  • The acquirees are located in the following four provinces in China, there are:

Province

Number of the acquirees

Henan province

1

Jilin province

1

Shaanxi province

2

Xinjiang Uygur Autonomous Region

2

*Such a conversion occurs if the performance of the acquirees hit a minimum of 10% of annual compound growth rate within the three years and if Jinong elects to have the note converted into the common shares of CGA. Whether to convert the notes into cash, equity or a combination of both is at the discretion of Jinong.

(The detailed summary of the transaction is available at: https://www.sec.gov/Archives/edgar/data/857949/000114420416111996/v443872_8k.htm)

These six companies are located in different provinces or regions in China. They all are the dominant participants in their local markets and are all conducting business mainly in agriculture sales and distribution industry, including fertilizers, pesticides, seeds and food.

"We had successfully closed this batch of acquisitions. Its success is the result of joint efforts from all involved parties. Our new team members, the founders of these newly joined companies, are sharing the same value with us. We own the same vision, the vision to transform ourselves from a manufacturer and a wholesaler to a platform with unlimited capacity to serve the underdeveloped but limitless rural market in China," said Mr. Zhuoyu Li, President of the Company, who is the architect and leader of the acquisitions. "Upon the close of the acquisitions, we are penetrating into the four market areas in which these newly joined companies are based. We are leaping toward our goal of building one of the largest platform ventures for rural market in China."

"I'm very glad with the success of the acquisitions. This is a great first step for our transformation," said Mr. Tao Li, the Chairman and CEO of the Company. "Jack Ma said that today is difficult, tomorrow will be more difficult, but the day after tomorrow will be beautiful. I believe the same. I am confident Zhuoyu and the team will thrive in the journey."

About China Green Agriculture, Inc.

The Company produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers and agricultural products through its wholly-owned subsidiaries, i.e.: Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. ("Jinong"), Beijing Gufeng Chemical Products Co., Ltd. ("Gufeng"), and a variable interest entity, Xi'an Hu County Yuxing Agriculture Technology Development Co., Ltd. ("Yuxing"). Jinong produced and sold 130 different kinds of fertilizer products as of March 31, 2016, all of which are certified by the government of the People's Republic of China (the "PRC") as Green Food Production Materials, as stated by the China Green Food Development Center. Jinong currently markets its fertilizer products to private wholesalers and retailers of agricultural farm products in 27 provinces, four autonomous regions, and three central-government-controlled municipalities in the PRC. Jinong had 1,064 distributors in the PRC as of March 31, 2016. Gufeng, and its wholly-owned subsidiary, Beijing Tianjuyuan Fertilizer Co., Ltd., are Beijing-based producers of compound fertilizers, blended fertilizers, organic compound fertilizers, and mixed organic-inorganic compound fertilizers. As of March 31, 2016, Gufeng produced and sold 332 different kinds of fertilizer products, and had 299 distributors in the PRC. For more information, visit http://www.cgagri.com. The Company routinely posts important information on its website.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic, business and environment conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, the execution of its ten-year growth plan, a satisfactory conclusion of the pending securities class action litigation and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Safe Harbor Statement and the risk factors detailed in the Company's reports filed with the SEC. China Green Agriculture undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release, except as required by applicable law or regulations.

For more information, please contact:

China Green Agriculture, Inc.
Ms. Ting Shi (English and Chinese)
Tel: +86-29-88266500
Email: tingshi@cgagri.com

Related Links

http://www.cgagri.com

https://www.sec.gov/Archives/edgar/data/857949/000114420416111996/v443872_8k.htm

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-green-agriculture-announces-strategic-acquisitions-300295854.html

Source: China Green Agriculture, Inc.
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