Brother Enterprises Holdings (002562), a company which makes vitamins K3 and B1, and produces leather additives, plans to acquire a 72 percent interest in Jiaxing Zhonghua Chemical Industry, a leading producer of vanillin, for 979 million yuan, reports yicai.com, citing a company filing.

The company will issue up to 20 million shares at 25 yuan per share to Shanghai Liuhefang Investment and Suzhou Xindecheng Equity Investment Partnership to finance the proposed acquisition.

The Shanghai-based investment firm will subscribe to 63 percent of the private placement, while the Suzhou company will account for the remaining 37 percent.

Brother Enterprises is the largest producer of vitamin K3 globally, while the target company produced 11,200 tons of vanillin in 2011, and sold 9,099 tons.

Zhonghua Chemical had net assets of 818 million yuan and total assets of 1.53 billion yuan at the end of 2011, and yielded net profit of 99.06 million yuan on revenue of 1.67 billion yuan last year.

According to Brother Enterprises, the vitamin and vanillin businesses share similar applications, and the proposed acquisition will help to extend its industry chain.

Source:capitalvue.com