KAIFENG, China, Feb. 11 /PRNewswire-Asia/ -- China Valves Technology, Inc. (Nasdaq: CVVT) ("China Valves" or the "Company"), a leading metal valve manufacturer with operations in the People's Republic of China (the "PRC"), today announced that that the Company has signed a letter of intent to purchase 100% equity ownership in Shanghai Pudong Hanwei Valve Co., Ltd. ("Hanwei Valve"), a valve manufacturing enterprise with several patents for high-tech valve specifications in the petrochemical and bioengineering industries.
Consideration for the acquisition is approximately RMB 137 million (approximately $20 million). The Company expects to close the acquisition in the first quarter of 2010.
Hanwei Valve, located in Shanghai, was established in 1992 and produces more than 20 series of valve products in over 6,000 different sizes ranging from 0.38 inches to 116 inches in diameter. Its main products include ball valves, check valves, butterfly valves, gate valves and other general purpose valves for a variety of applications, including oil refineries, chemical production and transport, electric power plants, and water supply. Hanwei Valve owns patents for a 24-way rotary valve used in simulating moving bed molecular sieve absorption-separation units in large-scale petrochemical equipment, for chromatogram separation units used in bioengineering, and for fully welded ball valves used in long distance gas pipelines. Hanwei Valve is the sole producer in China of the fully-welded ball valve and 24-way rotary valve.
The proposed transaction is subject to the satisfactory completion by the Company of due diligence and business negotiations, the finalization of terms for a definitive agreement, and the receipt of final approval from the Company's board of directors and any approvals required by the Chinese government.
"We are very excited about the addition of Hanwei Valves to China Valves, as we believe the sophisticated products and patented applications will improve our position in key end-user markets such as the petrochemical industry and bioengineering, while strengthening our distribution network in our core industries of water supply and power generation. For example, the 24 way rotary valve is a truly unique product as it performs duties that would require 144 valves from competitors, and therefore this product commands a very attractive unit price," said Mr. Siping Fang, Chairman and CEO of China Valves. "We are currently in the process of finalizing our internal due diligence, and hope to provide more updates to the market regarding the expected revenue and net income contribution of this acquisition after its completion."
About China Valves Technology, Inc.
China Valves Technology, Inc. through its subsidiaries, Zhengzhou Zhengdie Valve Co, Ltd., Henan Kaifeng High Pressure Valve Co., Ltd., Tai Zhou Tai De Valve Co., Ltd., Yangzhou Rock Valve Lock Technology Co., Ltd., and Able Delight (Changsha) Valve Co., Ltd., is engaged in development, manufacture and sale of high-quality metal valves for the electricity, petroleum, chemical, water, gas and metallurgy industries. The Company has one of the best known brand names in China's valve industry, and its history can be traced back to 1959 when it was formed as a state-owned enterprise. The Company develops valve products by extensive research and development and owns a number of patents. It enjoys significant domestic market shares and exports to Asia and Europe. For more information, visit http://www.cvalve.com
Safe Harbor Statements
Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company's ability to develop and market new products, the ability to access capital for expansion, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, changes in relationships with customers, changes in principal product profits and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise. This press release was developed by China Valves, and is intended solely for informational purposes and is not to be construed as an offer or solicitation of an offer to buy or sell the Company's stock. This press release is based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by China Valves to be accurate, nor does China Valves purport it to be complete. Opinions expressed herein are those of management as of the date of publication and are subject to change without notice.
For more information, please contact:
China Valves Technology, Inc.
Ray Chen, VP of Investor Relations
Tel: +1-650-281-8375
+86-139-2527-9478
Email: raychen@cvalve.net
Web: http://www.cvalve.com
CCG Investor Relations
Linda Salo, Sr. Financial Writer
Tel: +1-646-922-0894
Email: linda.salo@ccgir.com
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
