Jin Medical International Ltd. (NASDAQ:ZJYL) shares surged 17.33% to $2.37 after the bell on Tuesday after the company announced plans to acquire Huaxia Qiying Technology Co., a Chinese enterprise that primarily holds ginseng-related biological assets and technology.
According to a Securities and Exchange Commission filing on Tuesday, Jin Medical entered a VIE Control Master Acquisition Agreement with Erhua Medical Technology, Changzhou Zhongjin Medical and related parties to gain contractual control over Huaxia Qiying.
This type of agreement, known as a Variable Interest Entity (VIE) structure, is commonly used in cross-border mergers and acquisitions to grant a company contractual control and economic benefits over a target business without direct equity ownership, typically to navigate local restrictions on foreign ownership.
Deal Structure
The transaction is valued at $159.4 million and will be paid through the issuance of 71.28 million new Class A ordinary shares. The target company’s assets include rare ginsenosides, such as F2, Rg3, Rh2, CK and Rg5/Rk1, as well as its KB120 multi-stage fermentation platform.
The filing stated that the company may issue an additional 622,123 shares if an 80% equity transfer in Zhongjin Kangma, a subsidiary currently owned by Changzhou Zhongjin, is not completed by Oct. 31.
Financial advisor Veltrion Haskel Holdings will also receive a 10% fee, or roughly 8.48 million shares, at $1.88 per share.
Jin Medical said the deal supports expansion of its core elderly-care and rehabilitation-products business into a broader integrated senior-health platform.
Strategic Rationale
As a foreign private issuer, the company plans to use Nasdaq’s home-country practice exemption, where applicable, to avoid a shareholder vote that would otherwise be required for the share issuance.
The deal’s closing remains subject to customary conditions, including the completion of legal, financial, tax and regulatory due diligence, the execution of the VIE Agreements and Nasdaq’s notification process for the new shares.
Trading Metrics, Technical Analysis
Jin Medical has a market capitalization of approximately $158.43 million. Its stock has traded between a 52-week high of $14.40 and a 52-week low of $1.53.
ZJYL has a Relative Strength Index (RSI) of 36.42.
Over the past 12 months, the small-cap stock has fallen 84.53%.
CURV is currently positioned close to its annual low.
Price Action: The stock closed Tuesday’s regular session at $2.02, down 2.88%, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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