Singapore-listed SunMoon Food Company Tuesday said it had reached a deal to buy 51 per cent stake in Harvest Season Singapore, that runs fruit stores in China, for S$3.1 million.
SunMoon will buy 510,000 ordinary shares in Harvest Season as part of the deal.
The deal will see SunMoon issue 60 million new shares at 5.18 cents each to seller Zhang Jiang Quan, who owns Harvest Season. At this price point, SunMoon’s purchase consideration is S$3.11 million.The new shares constitutes 18.82 per cent of SunMoon’s current issued share capital.
Harvest Season operates six fruit stores in and around Shanghai, PRC. The company claims to be a “fast expanding, premium-concept fruit retailer” operating six stores in Zhenjiang and Nanjing in the Jiangsu province. The province is home to a population size of more than 100 million and is one of the fastest growing middle income regions in China, SunMoon said in its regulatory filing.
“Harvest Season operates complementary online and store-based delivery channels, thereby allowing it to reach out to a wider field of consumers who can benefit from both the convenience of delivery and immediate purchase of fresh, quality fruits from its physical stores. The fresh, stylish and upbeat concept for its stores which sell a combination of imported and domestic fruits, juices and convenience foods attracts all age groups,” the regulatory filing added.
Explaining the rationale behind the proposed acquisition, SunMoon said: “The company believes that it can tap on and benefit from this growing consumption in China of fruit staples through retail and online delivery channels by acquiring a controlling stake in Harvest Season SG, which will, by completion, have a cash and NTA (net tangible assets) position of at least S$3 million earmarked for working capital and the development of more stores in China.”
