China’s Goodbaby International to buy affiliate baby products retailer for US$360m
Goodbaby International Holdings, a mainland Chinese baby-care products manufacturer, saw its shares surge more than 10 per cent on Tuesday after it announced it would purchase baby-care products retailer Oasis Dragon Limited.
The company said it would buy Oasis Dragon from Goodbaby China Holdings Limited, a firm affiliated with Song Zhenghuan, chief executive of Goodbaby International, for US$360 million, of which US$120 million will be paid in cash with the remainder being 536 million consideration shares at the issue price of HK$3.50, a premium of around 6.4 per cent from the closing price on Monday.
Owning two brands “gb” and “Family by GB”, Oasis Dragon operates an online sales channel that provides customers with maternity and baby-care products, apparel and durable juvenile products, according to a filing to the Hong Kong stock exchange.
The acquisition could further broaden the group’s product portfolio and tap the strong growth in mainland China’s mother, baby and child products market, which is driven by consumption upgrades and the new two-child policy, the company said in the statement.
The shares closed up 10 per cent to HK$3.60 on Tuesday, reaching a one-month high.
Founded in 1989 in the coastal province of Jiangsu by Song, Goodbaby International is now mainly involved in designing and manufacturing baby strollers and children’s safety seats for cars, as well as other durable juvenile products.
After acquiring well known baby care products brands Evenflo and Cybex in 2014, the company now does around 70 per cent of its business in overseas markets in Asia, North America and Europe, and is China’s largest manufacturer and retailer of baby-care products.
With the more than 400,000 daily active users of Oasis Dragon’s online platform, Goodbaby will be able to gather data to provide insights to improve its customer experience, tailor products for different retail channels, and operate more efficiently, the company said in the filing.