PURE.L Regulatory News (PURE)

7 Apr 2008 08:37

PureCircle Limited07 April 2008 PureCircle Limited('PureCircle' or 'the Group') Acquisition of remaining minority interest in Ganzhou Julong High-Tech FoodIndustry Ltd The transaction PureCircle announces that it has entered into a sales and purchase agreement forthe acquisition of a further 40% equity interest in Ganzhou Julong High-TechFood Industry Ltd ('GJF') for a purchase consideration of US$8.5 million.PureCircle already holds a 55% interest in GJF and proposes to acquire theremaining 5% which it does not already hold in the event Chinese authoritiespermit it to hold a 100% interest. The acquisition of the 40% equity interest issubject to approval of relevant authorities in China. The consideration for the acquisition of the 40% is to be satisfied via theissue of 2,437,330 new ordinary shares at US$3.50 per share. The pricing wasdetermined by reference to total investments of US$11.4 million made byPureCircle to acquire the 55% in GJF and adjusted net tangible asset valuationof GJF of US$22.3 million as at 31 January 2008. The new PureCircle shares will be subject to a three year lock-in period duringwhich the recipients will be restricted from sale. Under the terms of the arrangement the vendors, who are also key executives ofGJF, have agreed to enter into five year service agreements. Rationale and Basis GJF is principally involved in the manufacturing and sale of crude steviaextract with operations in China. GJF currently has production capacity of1,000 metric tonnes per annum of crude stevia extracts. Extraction capacity isbeing expanded to 3,000 metric tonnes per annum and GJF is currently recognisedas the largest supplier of crude extract in the world. The acquisition will enable the Group to: a) fully reflect the benefits of the new 2,000 metric tonne stevia extraction plant; b) fully integrated and strengthen its entire supply chain; c) implement group-wide policies and controls; and d) realign the interests of minorities with PureCircle shareholders. GJF recorded a profit after tax of US$1.7 million for the year ended 31 December2007 and had net assets of US$29.9 million as at 31 December 2007. Details of GJF's previous trading history is provided in PureCircles AIMAdmission Document dated 6 December 2007. The acquisition is expected to generate future earnings enhancement for theGroup. 7 April 2008 Enquiries CollegeHill +44 20 7457 2020 Mark GarrawayAdam Aljewicz PureCircle AIM Nominated Adviser RFC Corporate Finance LtdStephen Allen +618 9480 2500 This information is provided by RNS The company news service from the London Stock Exchange