Carlyle PIPEs China Agritech

Carlyle Group has purchased a 16.5% stake in China Argitech, an Asian organic fertilizer maker, for $15 million.

PRESS RELEASE:
China Agritech, Inc. (NasdaqGM: CAGC) (“China Agritech”, or the “Company”), a leading national
organic fertilizer manufacturer and distributor in China, today announced the signing and closing of a private placement with Carlyle Asia Growth Partners, the growth capital arm of The Carlyle Group, of 1,392,768 shares of China Agritech common stock and warrants to purchase up to an additional 928,514 shares of China Agritech common stock for aggregate gross proceeds of $15
million. As a result of the transaction, The Carlyle Group, through its affiliates holds approximately 16.5% of the issued and outstanding China Agritech common stock. In the event that the Company does not meet a net income target of $11.5 million for fiscal year 2009, The Carlyle Group affiliates will be issued additional shares of common stock and the initial
warrant exercise price of $10.77 per share will be reduced, thereby resulting
in additional warrant shares being issuable upon exercise of the warrants. The
proceeds from the private placement will be used for business expansion and
working capital purposes.
The stockholders of China Agritech, acting by majority consent in lieu of
a stockholders’ meeting, approved the transactions contemplated by the
securities purchase agreement, including the issuance of the shares of common
stock and the warrants, as required by Nasdaq Marketplace Rule 5635.
As part of the securities purchase agreement, The Carlyle Group has the
right to appoint one Director to the Board of Directors and, as a result, the
Board of Directors will be expanded to have six members. The Carlyle Group
also has the right to invest between $5-$10 million in any additional
financing by the Company undertaken during the one-year period commencing on
the closing date.
Mr. Yu Chang, Chairman and Chief Executive Officer of China Agritech,
commented, “This strategic investment by a prestigious investment firm like
The Carlyle Group, strengthens our shareholder base. We believe their
investment is an endorsement of our strategic plans and our ability to
generate shareholder value. With the new financial and global resources from
Carlyle, we will be able to accelerate our growth plans to further penetrate
the large fertilizer market in China and strengthen our leadership position in
our industry. We look forward to the strategic assistance Carlyle will provide
to help us reach our long-term goals.”
Mr. Wayne Tsou, Managing Director and Head of Carlyle Asia Growth
Partners,
said, “We are excited to establish a strategic relationship with China
Agritech and broaden our reach to the agricultural industry, one of the pillar
industries of China. Under the leadership of a capable management team, China
Agritech has built a successful track record and is poised for accelerated
growth in the years ahead. We are dedicated to providing global resources and
expertise to support China Agritech’s further expansion.”
The Carlyle Group is one of the world’s largest private equity firms, with
more than $86.1 billion under management. With 64 funds across four investment
disciplines (buyouts, growth capital, real estate and leveraged finance),
Carlyle combines global vision with local insight, relying on a top-flight
team of 475+ investment professionals operating out of offices in 20 countries
to uncover superior opportunities in North America, Europe, Asia, Australia,
the Middle East/North Africa and Latin America.
About China Agritech, Inc.
China Agritech, Inc. is engaged in the development, manufacture and
distribution of liquid and granular organic compound fertilizers and related
products in China. The Company has developed proprietary formulas that provide
a continuous supply of high-quality agricultural products while maintaining
soil fertility. The Company sells its products to farmers located in 28
provinces of China. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw
Capital Group, Inc. (Nasdaq: RODM), is an advisor to China Agritech.
For more information about the Company, please visit
http://www.chinaagritechinc.com .
Safe Harbor Statement
This release may contain certain “forward-looking statements” relating to
the business of China Agritech and its subsidiary companies, which can be
identified by the use of forward-looking terminology such as “believes,”
“expects,” “anticipates,” “estimates” or similar expressions, including, but
not limited to, statements regarding the continued demand for China Agritech’s
products, China Agritech’s ability to sustain growth for the balance of the
year and China Agritech’s ability to generally meet all of its objectives.
Such forward-looking statements involve known and unknown risks and
uncertainties, including all business uncertainties relating to product
development, marketing, concentration in a single customer, raw material
costs,
market acceptance, future capital requirements, and competition in general and
other factors that may cause actual results to be materially different from
those described herein as anticipated, believed, estimated or expected.
Certain of these risks and uncertainties are or will be described in greater
detail in our filings with the SEC. Except as required by law, China Agritech
is under no obligation to update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.
China Agritech, Inc.
(NasdaqGM: CAGC) (“China Agritech”, or the “Company”), a leading national
organic fertilizer manufacturer and distributor in China, today announced the
signing and closing of a private placement with Carlyle Asia Growth Partners,
the growth capital arm of The Carlyle Group, of 1,392,768 shares of China
Agritech common stock and warrants to purchase up to an additional 928,514
shares of China Agritech common stock for aggregate gross proceeds of $15
million. As a result of the transaction, The Carlyle Group, through its
affiliates holds approximately 16.5% of the issued and outstanding China
Agritech common stock. In the event that the Company does not meet a net
income target of $11.5 million for fiscal year 2009, The Carlyle Group
affiliates will be issued additional shares of common stock and the initial
warrant exercise price of $10.77 per share will be reduced, thereby resulting
in additional warrant shares being issuable upon exercise of the warrants. The
proceeds from the private placement will be used for business expansion and
working capital purposes.
The stockholders of China Agritech, acting by majority consent in lieu of
a stockholders’ meeting, approved the transactions contemplated by the
securities purchase agreement, including the issuance of the shares of common
stock and the warrants, as required by Nasdaq Marketplace Rule 5635.
As part of the securities purchase agreement, The Carlyle Group has the
right to appoint one Director to the Board of Directors and, as a result, the
Board of Directors will be expanded to have six members. The Carlyle Group
also has the right to invest between $5-$10 million in any additional
financing by the Company undertaken during the one-year period commencing on
the closing date.
Mr. Yu Chang, Chairman and Chief Executive Officer of China Agritech,
commented, “This strategic investment by a prestigious investment firm like
The Carlyle Group, strengthens our shareholder base. We believe their
investment is an endorsement of our strategic plans and our ability to
generate shareholder value. With the new financial and global resources from
Carlyle, we will be able to accelerate our growth plans to further penetrate
the large fertilizer market in China and strengthen our leadership position in
our industry. We look forward to the strategic assistance Carlyle will provide
to help us reach our long-term goals.”
Mr. Wayne Tsou, Managing Director and Head of Carlyle Asia Growth
Partners,
said, “We are excited to establish a strategic relationship with China
Agritech and broaden our reach to the agricultural industry, one of the pillar
industries of China. Under the leadership of a capable management team, China
Agritech has built a successful track record and is poised for accelerated
growth in the years ahead. We are dedicated to providing global resources and
expertise to support China Agritech’s further expansion.”
The Carlyle Group is one of the world’s largest private equity firms, with
more than $86.1 billion under management. With 64 funds across four investment
disciplines (buyouts, growth capital, real estate and leveraged finance),
Carlyle combines global vision with local insight, relying on a top-flight
team of 475+ investment professionals operating out of offices in 20 countries
to uncover superior opportunities in North America, Europe, Asia, Australia,
the Middle East/North Africa and Latin America.
About China Agritech, Inc.
China Agritech, Inc. is engaged in the development, manufacture and
distribution of liquid and granular organic compound fertilizers and related
products in China. The Company has developed proprietary formulas that provide
a continuous supply of high-quality agricultural products while maintaining
soil fertility. The Company sells its products to farmers located in 28
provinces of China. Rodman & Renshaw, LLC, a subsidiary of Rodman & Renshaw
Capital Group, Inc. (Nasdaq: RODM), is an advisor to China Agritech.
For more information about the Company, please visit
http://www.chinaagritechinc.com .
Safe Harbor Statement
This release may contain certain “forward-looking statements” relating to
the business of China Agritech and its subsidiary companies, which can be
identified by the use of forward-looking terminology such as “believes,”
“expects,” “anticipates,” “estimates” or similar expressions, including, but
not limited to, statements regarding the continued demand for China Agritech’s
products, China Agritech’s ability to sustain growth for the balance of the
year and China Agritech’s ability to generally meet all of its objectives.
Such forward-looking statements involve known and unknown risks and
uncertainties, including all business uncertainties relating to product
development, marketing, concentration in a single customer, raw material
costs,
market acceptance, future capital requirements, and competition in general and
other factors that may cause actual results to be materially different from
those described herein as anticipated, believed, estimated or expected.
Certain of these risks and uncertainties are or will be described in greater
detail in our filings with the SEC. Except as required by law, China Agritech
is under no obligation to update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.