Vancouver-based Asia Packaging Group Inc. (TSX-V:APX) announced this morning that it has signed a letter of intent (LOI) for the potential $80m acquisition of a China-based manufacturer and seller of shopping bags.
Under the deal, Asia Packaging would acquire Yuanxing Holdings (Hong Kong) Ltd., a holding company that owns all shares of Yuanxing Package (China) Co. Ltd. and Yuanxing Package (Suzhou) Co., Ltd.
Under the terms of the LOI, Asia Packaging would issue its shares to the target company, representing a valuation of approximately $80 million.
Given the size of Yuanxing, the transaction would represent a reverse takeover.
Completion of the acquisition is subject to various conditions, including the execution af a definitive agreement by July 31, 2012.
Asia Packaging Group manufactures and distributes specialized packaging products. From its plant in Jaingxi Province, the company produces film and cast polypropylene packaging for the Chinese pharmaceutical and food industries.
