Kadant Expands Stock-Preparation Business in China
June 6, 2006 - Kadant Inc. announced today that its Kadant Light Machinery (Jining) Co., Ltd. subsidiary in China has acquired, and assumed operating responsibility for, the business of Jining Huayi Light Industry Machinery Co., Ltd. ("Huayi"). Huayi is a manufacturer of stock-preparation systems in China, and is located in the city of Jining in the Shandong Province.
On May 31, 2006, Kadant entered into a business transfer agreement with the sellers to commence the closing process for acquiring the Huayi assets. By June 2, 2006, Kadant had acquired the machinery, equipment, inventory, and related assets, and had assumed operating responsibility of the business. The acquisition of certain land-use rights and buildings will be completed upon the receipt of various government filings and registrations.
The total purchase price for the acquisition, including the remaining assets to be acquired, will be approximately $20 million.
The closing process is expected to be completed by the end of the second quarter.
The acquisition will be funded with approximately $10 million in borrowings in China, through a financing agreement with the Bank of China Ltd., and approximately $10 million in cash.
SOURCE: Kadant Inc.