Shenzhen, China - Action Acquisition Corp. said 25 Oct that that it has signed an agreement to buy Liuzhou Xinhua Rubber Sealing Co. Ltd, a Chinese manufacturer of gaskets and sealants for automobile window and doors, from the company's existing shareholders, in exchange for abut 2 million ordinary shares of Action's stock.
The deal will make ORB-Fortune an even larger player in the Chinese automotive glass sealant sector: the company currently claims to be the largest producer and supplier of windshield adhesives in China.
Action Acquisition's existing business is Shenzhen ORB-Fortune New-Material Co. Ltd, a manufacturer and distributor of polyurethane adhesive seal materials, primers, and cleaners for the automotive industry in China.
The deal, expected to close 3 Nov subject to due diligence, will be a good strategic fit, with Liuzhou Xinhua's products complementing Shenzhen ORB-Fortune's range. As Junning Ma, Action's chairman and ceo, said in a company statement: "We believe that Xinhua Rubber Sealing's business model and platform are strategically well suited to integrate into and expand our existing operations."
Liuzhou Rubber Sealing was set up in 2006 and has plants in the New Industrial Park of Liuzhou City, Guangxi Province. It employs 280 people, including 45 engineers and technicians, and in 2009 reported revenues of RMB 40 million ($6 million). An Action Acquisition statement said that Liuzhou Rubber Sealing estimates that its revenues for 2010 will approach double this, at RMB 80 million, with anticipated net profit of RMB 8 million.
ORB-Fortune manufactures and distributes high-performance polyurethane adhesive seal materials, primers and cleaners and provides bonding solutions for a wide range of industrial applications including, shipping, construction, and electronics, from its base in the Futian District of Shenzhen, Guangdong Province. Action Acquisition notes that ORB-Fortune has "a strong presence in the Chinese automotive sector."