United Food Holdings, a producer and supplier of soybean products, said it would buy 80 percent stakes in each of three animal feed-related companies in China for 120 million yuan (S$24.5 million).
China-based United Food Holdings will buy 80 percent stakes each in Hebei Xingrun Shengwu Keji Gufen, Chengde Purun Shengwu Zhiyao and Benchmark Trade, which are involved in agribusiness and animal feed operations in China.
United Food will pay the three vendors 35 million yuan in cash. One of the vendors, Lin Zhongshi, will also receive 85 million yuan of zero per cent bonds convertible into United Food shares at 45 Singapore cents per share.
The acquisition helps United Food gain access to new markets, customers and business opportunities in the veterinary science and bio-pharmaceutical industries. It also strengthens its foothold in the agribusiness and food industry in China.
"This proposed acquisition is aligned with the group's plans to diversify and expand into complementary business areas within the agricultural and food production industry...," the company said in a statement on Thursday.
The company plans to fund the deal via its internal resources.
It has appointed Crowe Horwath Capital as its financial adviser in relation to the proposed acquisition.
Shares in United Food rose 1.4 percent to S$0.37 on the Singapore Exchange. The stock has soared 1,221 percent so far this year.
