Happiness Development to Acquire Hekangyuan, One of the Largest Healthcare Product Distributors in Fuzhou Area in China
Happiness Development Group Limited (“HAPP” or the “Company”), (NASDAQ: HAPP) an emerging and diversified company engaging in the business of production of nutraceutical and dietary supplements, providing e-commerce sales and e-commerce marketing solutions, and the sales of automobile today announced that it has signed an equity transfer agreement (the “Agreement”) to acquire 100% of the equity interest in Fuzhou Hekangyuan Trading Co., Ltd. (“Hekangyuan”) to further strengthen the distribution network of the Company.
Hekangyuan believes that it is one of largest healthcare product distributors in Fuzhou, China. Hekangyuan generated revenue of $17.6 million and $13.5 million, with net income of approximately $790,000 and $$579,000 for the fiscal year ended December 31, 2021 and 2020, respectively. Pursuant to the terms of the Agreement, the parties agreed that the valuation of Hekangyuan is $12 million and the Company will issue 10 million class A ordinary shares to the shareholders of Hekangyuan in addition to a cash payment of $8 million, in exchange for the 100% equity of Hekangyuan. The Company will have the right to require the Hekangyuan shareholders to purchase back the ordinary shares at a consideration of $12 million in cash if Hekangyuan is unable to reach certain performance target including a net income of $4.5 million during the next three fiscal years of 2022, 2023 and 2024.
“Hekangyuan has been known for its healthcare product distribution network in Fuzhou area and we have been in talk with them about the acquisition in the last several months. We believe after the acquisition of Hekangyuan, we will further strengthen our leading position in the field of healthcare products in Northern Fujian. At the same time, with the successful expansion of our online sales, we will also help Hekangyuan to fully utilize its advantages of supply chain management and distribution abilities,” said Mr. Xuezhu Wang, CEO of the Company.
Source: Happiness Development Group Limited