FUQI International to acquire Shanghai Tian Mei Jewelry Co. Ltd. and Beijing Yinzhong Tian Mei Jewelry Co., Ltd.

FUQI International, Inc. has signed a Term Sheet to purchase two jewelry companies, Shanghai Tian Mei Jewelry Co. Ltd. and Beijing Yinzhong Tian Mei Jewelry Co. Ltd., collectively known as Temix (”Temix”), for 100% ownership of the business from their existing owner, Mr. Chujian Huang.

The total amount of consideration payable for Temix is approximately RMB 135 million (approximately USD$18.5 million, based on a conversion price of USD: RMB 1.00:7.3), with $9.5 million consideration to be paid in cash and the remaining consideration to be paid in restricted common stock. The number of FUQI’s shares to be included in the equity portion of the purchase price for Temix is subject to the achievement of certain revenue and net income
performance targets over a three year period.

FUQI will acquire the Temix chain operation through its wholly owned subsidiary, Shenzhen Fuqi Jewelry Co., Ltd. The Company expects the acquisition to close near the end of the first quarter of fiscal 2008.

Temix is a 50 outlet branded jewelry store chain with locations primarily in Beijing, Shanghai and Ningbo. Of the 50 outlets, 7 are stand alone stores and 43 are store counters within department stores. The chain primarily sells diamond jewelry but also sells karat gold and gemstone jewels including ruby and jade. As of December 31, 2007, Temix had TTM revenues of $12.3 million (unaudited) and the company was profitable.

Temix has been led by Mr. Chujian Huang, who is the founder and CEO of Temix and a 15 year veteran in China’s jewelry industry, particularly in the Yangtze Delta region. Mr. Huang will become a full time employee of FUQI responsible for managing the Temix chain and will report to Ms. Jianying Li, Director of Retail Operations for FUQI International, Inc.

Mr. Yu Kwai Chong, Chairman of FUQI International said we are very pleased to welcome Temix to our growing business operations. This addition represents a strategic opportunity for us to further penetrate an attractive consumer demographic, diversify our business operations, improve our sales and margin performance and expand our presence at the retail level. Temix is a well known, young, white collar brand in Beijing and Shanghai and we have the opportunity to strengthen the performance at each outlet by better capitalizing Temix counters and stores to ensure they have an appropriate level of inventory, a compelling mix of fashionable jewelry designs and strong brand promotion.

Story link: FUQI International to acquire Shanghai Tian Mei Jewelry Co. Ltd. and Beijing Yinzhong Tian Mei Jewelry Co., Ltd.