KAIFENG, China, April 22 /PRNewswire-Asia/ -- China Valves Technology, Inc. (OTC Bulletin Board: CVVT) ("China Valves" or the "Company"), a leading metal valve manufacturer with operations in the People’s Republic of China (the "PRC"), today announced that its newly established wholly-owned foreign enterprise, Tai Zhou Tai De Valve Co., Ltd. ("Tai De Valve"), has completed the acquisition of 100% equity ownership of Taizhou Wote Valve Co., Ltd. ("Taizhou Wote").
Taizhou Wote manufactures mostly mid- and small-diameter metal butterfly valves, mid-quality valve products for use in civil water supply and drainage systems. Located in Taizhou, Jiangsu Province, China, Taizhou Wote has designed production capacity of 3,200 metric tons of valves per annum, and currently is operating at a 70% utilization rate.
Through Tai De Valve, China Valve will pay $3.0 million in cash for Taizhou Wote, and Taizhou Wote will no longer exist after the acquisition. China Valves plans to spend an additional estimated $1.0 million to upgrade Tai De Valve’s production technology and manufacturing equipment after the acquisition. The Company expects to spend four months completing the upgrade. This additional capital expenditure will increase Tai De Valve’s existing production capacity by 50% to 4800 metric tons of valves per annum and give it the ability to produce higher-end valve products.
With the consideration of the manufacturing capacity after the upgrade, China Valves expects its acquisition of Taizhou Wote to add approximately $7.4 million in sales revenues and approximately $1.5 million in net income to the Company during the next twelve months.
"We are pleased to purchase what we believe is a well valued butterfly valve manufacturing company. This acquisition increases our mid-end valve production capacity, and will allow us to use more of our pre-existing manufacturing capacity to produce higher-end products. In addition, Tai De Valve’s products complement our product lines, and give us access to new customers in new markets. Upgrading Tai De Valve’s technology and equipment will also increase our ability to produce a wider range of technology-advanced products," commented Mr. Siping Fang, Chairman and CEO of China Valves. "This purchase helps us maintain our leading position in the valve industry."
Further details of the terms of this transaction are available in the Company’s 8-K, which was filed with the U.S. Securities and Exchange Commission on April 21, 2009.
About China Valves Technology, Inc.
China Valves Technology, Inc. through its subsidiaries, Zhengzhou Zhengdie Valve Co, Ltd., Henan Kaifeng High Pressure Valve Co., Ltd., and Tai Zhou Tai De Valve Co., Ltd. is engaged in development, manufacture and sale of high-quality metal valves for the electricity, petroleum, chemical, water, gas and metallurgy industries. The Company has one of the best-known brand names in China’s valve industry, and its history can be traced back to 1959 when it was formed as a state-owned enterprise. The Company develops valve products by extensive research and development and owns a number of patents. It enjoys significant domestic market shares and exports to Asia and Europe. For more information, visit http://www.cvalve.com .
Safe Harbor Statements
Any statements set forth above that are not historical facts are
forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, but are not limited to, the Company’s ability to develop and market new products, the ability to access capital for expansion, the ability to acquire other companies, changes from anticipated levels of sales, changes in national or regional economic and competitive conditions, changes in relationships with customers, changes in principal product profits and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to update or revise to the public any forward-looking statements, whether as a result of new information, future events or otherwise. This press release was developed by China Valves, and is intended solely for informational purposes and is not to be construed as an offer or solicitation of an offer to buy or sell the Company’s stock. This press release is based upon information available to the public, as well as other information from sources which management believes to be reliable, but it is not guaranteed by China Valves to be accurate, nor does China Valves purport it to be complete. Opinions expressed herein are those of management as of the date of publication and are subject to change without notice.
For more information, please contact:
China Valves Technology, Inc.
Ray Chen, VP of Investor Relations
Tel: +1-650-281-8375
+86-13925279478
Email: raychen@cvalve.net
Web: http://www.cvalve.com
CCG Investor Relations
Crocker Coulson, President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
