New Zealand tapware manufacturer Methven has announced that it will buy Chinese company Invention Sanitary for as much as $US 10 million.
The deal (in US dollars) is made up of $4 million cash, $4 million in Methven shares, and potential payments of up to $1 million a year if earnings targets are made by Methven in 2015 and 2016.
Invention Sanitary’s founder Hui Zhuang has decided to retire and Methven has the right to buy his company.
The Chinese company was established 12 years ago, purely to supply Methven with products that the Auckland-based company had designed, AAP reports.
"Our partnership with Invention Sanitary has been a key contributor to the expansion and success of Methven's proprietary tapware ranges,” Methven’s CEO Rick Fala told AAP.
"The acquisition of Invention Sanitary is value accretive and will provide additional profits to fund further investment in research and development and international market growth initiatives as well as underpinning future dividends."