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NINGDE, China - Oriental Rise Holdings Limited (NASDAQ:ORIS), an integrated tea supplier in mainland China with a market capitalization of $3.85 million and annual revenues of $15 million, announced Monday it has entered into a non-binding letter of intent to acquire Fujian Daohe Tea Technology Co., Ltd. and Ningde Minji Tea Co., Ltd.
The potential acquisition targets are both tea distributors in China. Fujian Daohe specializes in premium tea products and processing technology, while Ningde Minji focuses on nationwide tea distribution through online and offline channels.
The company will now begin due diligence and work toward negotiating a definitive acquisition agreement. The letter of intent is non-binding, and either party may terminate discussions at any time.
"The signing of this LOI is an exciting step toward strengthening our position as a leading integrated tea supplier in China," said Dezhi Liu, Chief Executive Officer of Oriental Rise. "Bringing Daohe and Minji into the Oriental Rise family would significantly expand our distribution capabilities, customer base, and supply-chain efficiency."According to InvestingPro analysis, Oriental Rise is currently trading below its Fair Value, with a P/E ratio of 5.26 and a price-to-book ratio of just 0.06. InvestingPro subscribers have access to 12 additional key insights about ORIS’s valuation and growth potential.
The contemplated acquisition aligns with Oriental Rise’s strategy to expand its tea distribution footprint and strengthen vertical integration in China’s tea market. The company expects the potential integration to accelerate revenue growth and improve operational efficiency.
Oriental Rise Holdings is an integrated supplier of tea products in mainland China, with operations covering cultivation, processing, and sales of tea products to business operators and retail customers. The company operates tea gardens located in Zherong County, Ningde City in Fujian Province.
This announcement is based on a press release statement from Oriental Rise Holdings Limited.
In other recent news, Oriental Rise Holdings Limited has announced the pricing of its public offering, which includes up to 14.8 million units at $0.4681 per unit on a best-efforts basis. Each unit comprises one ordinary share or a pre-funded warrant and one common warrant, which can be exercised immediately at the same price and will expire in five years. This offering has raised concerns among investors due to the dilutive nature of the common warrants, which include features like a zero-exercise price option and automatic downward price adjustments. Furthermore, Oriental Rise Holdings received a deficiency notification from Nasdaq for failing to meet the minimum bid-price requirement, as its shares traded below $1.00 for 30 consecutive business days. This notice highlights the company’s ongoing challenges in maintaining compliance with Nasdaq Listing Rule 5550(a)(2). These developments are critical for investors to consider as they assess the company’s current standing and future prospects.
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