China Discovery Acquisition acquires HeNan Smart Food

China Discovery Acquisition Corp., a US-based blank check company, has acquired 100% stake in HeNan Smart Food Company, a China-based producer of instant noodles.

Announcement (April 14, 2009):

China Discovery has entered into a share exchange agreement to acquire 100% stake in HeNan for a consideration of approximately $87.4 million.

Under the terms of the transaction, China Discovery will acquire 100% of HeNan in exchange for 14.7 million newly issued shares of China Discovery and cash consideration of $3 million.

After the closing, China Discovery will have approximately 21.8 million basic shares outstanding and 24.4 million fully diluted shares outstanding. HeNan current shareholders will own approximately 67.4% of the basic shares outstanding and 60.3% of the fully diluted shares outstanding in the pro-forma company.

In addition, pursuant to an earn-out provision in the share exchange agreement, China Discovery has agreed to issue to HeNan's shareholders up to 6.8 million additional shares if certain net income targets are met.

HeNan's shareholders will also be eligible to receive a cash payment of $5 million in the event that 75% or more of China Discovery's publicly traded warrants are exercised prior to their expiration on June 17, 2011.

On the completion of the transaction, China Discovery will change its name to Si Mei Te Corporation. The transaction is expected to close by the end of second quarter of 2009.

Deal Value (US$ Million) 126.16
Deal Type                Acquisition
Sub-Category             100% Acquisition
Deal Status              Completed: 2009-06-26

Deal Participants

Target (Company)   HeNan Smart Food Company
Acquirer (Company) China Discovery Acquisition Corp.