China Health signs letter of intent to acquire Shaanxi, maker of gynecological medicinal pad

By E. Janene Geiss

Philadelphia, March 6 - China Health Holding announced Monday that the company entered into a letter of intent with Shaanxi Wanan Pharmaceutical Co. Ltd., China for the proposed acquisition by the company of 51% or more of Shaanxi Wanan Pharmaceutical Co., Ltd.

Shaanxi has agreed to offer the company with first refusal rights and legal exclusive rights for further acquisition of 51% or more of Shaanxi Wanan Pharmaceutical Co., Ltd. in the next 12 months, according to a company news release.

The completion of the acquisition is subject to the negotiation and execution of a definitive acquisition agreement, as well as to the completion of full legal and financial due diligence, including the determination of the valuation of Shaanxi and the completion and the company's delivery of audited financial statements.

The acquisition highlights China Health's updated growth strategies and delivers a clear growth strategy to the company, officials said.

Shareholders will benefit through the strategic combination of assets and net income and unique enhanced natural medicinal products and technologies and established China market with major natural medical companies and pharmaceutical companies in China and throughout the world, officials said.

Shaanxi, founded in 1993, is a P.R. China State Drug Administrative Certified ISO13485 (1996) and ISO9001 (2000) pharmaceutical manufacturer and research & development company, based in Xian, Shaanxi, China.

Shaanxi has fixed assets of about 65 million yuan and annual gross sales of about 50 million yuan.

Currently, the company has about 300 employees, 50% of whom are medical professionals, including a scientific research group consisting of five medical doctors and 11 masters and an expert group that consists of more than 70 gynecological doctors.

Shaanxi's main product, the patented gynecological pad, made of 49 traditional Chinese medicines, is primarily for inflammation and other diseases associated with the female external genital system.

By allowing the skin to absorb the medicines, the pad also increases immune response and helps prevent and reduce risk of attracting and transmitting gynecological diseases and AIDS.

As the only pharmaceutical manufacturer and the only national leading "brand" for this kind of product in China, the company currently has about 5 million to 6 million regular customers in China. As the product also has preventative functions, hundreds of millions of adult women in China may also be potential users, officials said.

China Health Holding, based in Beijing, is a developer, marketer and manufacturer of innovative enhanced traditional chinese medicinal herbal supplement product lines. The company's product lines also include dietary food supplements that are helpful in strengthening the immune system and cardio-cerebral vascular function as well as promoting overall physical and mental health.

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