China Flavors and Fragrances Company Limited (SEHK:3318) entered into memorandum of understanding to acquire Kimree, Inc. from Ree Min Limited, Ree Jia Limited, Ree Jie Limited, Ree Lin Limited, Ree Zhi Limited and Ree Fen Limited on November 11, 2015. Pursuant to the memorandum, China Flavors and Fragrances shall pay the sellers the deposit in the amount of CNY 3 million as earnest money. As of December 17, 2015, further to the memorandum of understanding China Flavors and Fragrances Company Limited shall pay CNY 34.5 million as further deposit. The formal agreement will be entered into by the parties within 10 days upon completion of the due diligence review on Kimree by China Flavors and Fragrances and the result of which is to the satisfaction of China Flavors and Fragrances. In the event that the formal agreement is entered into between the sellers and China Flavors and Fragrances, the deposit shall be applied as partial payment of the consideration for the transaction in accordance with the terms of the formal agreement. The memorandum will be terminated and the deposit will be returned if, inter alia, China Flavors and Fragrances is in its absolute discretion not satisfied with the results of the due diligence review upon or before the expiry of the exclusivity period; or China Flavors and Fragrances is satisfied with the results of the due diligence but the sellers reject or fail to enter into the formal agreement within the formal agreement timeline; or the parties fail to enter into the formal agreement upon the expiry of the exclusivity period. China Flavors and Fragrances Company Limited (SEHK:3318) entered into an agreement to acquire Kimree, Inc. from Ree Min Limited, Ree Jia Limited, Ree Jie Limited, Ree Lin Limited, Ree Zhi Limited and Ree Fen Limited for CNY 750 million in cash on January 25, 2016. The consideration will be payable as to CNY 37.5 million already paid; CNY 200 million within 5 business days after the condition precedent having been fulfilled; CNY 362.5 million within 20 business days after the completion date subject to the fulfillment of all the conditions precedent and CNY 150 million payable depending on the Audited Consolidated Net Profit of Kimree for the financial years 2016, 2017 and 2018. The consideration will be financed by China Flavors primarily through internal cash resources and bank borrowings and if required, debt and equity fund raising and/or other means. The deal is subject to approval from the Stock Exchange, China Flavors’ shareholder approval, Kimree having repaid all shareholders’ loans, the audited consolidated net profit of Kimree shall not be less than CNY 39 million and the consolidated revenue of Kimree shall not be less than CNY 220 million and total liabilities shall not exceed CNY 30 million as at the date of the Completion Accounts, assign the ownership of the IP Rights to Kimree at nil consideration and other conditions. Completion shall take place on the 3rd business day after all conditions precedent are fulfilled or waived by China Flavors (or such other date as agreed between China Flavors and the vendors). PricewaterhouseCoopers Hong Kong acted as accountant and I-Access Investors Limited acted as financial advisor for China Flavors And Fragrances Company Limited. BMI Appraisals Limited acted as the independent valuer in the transaction. The currency conversion has been done through www.oanda.com as of December 31, 2014. China Flavors and Fragrances Company Limited (SEHK:3318) completed the acquisition of Kimree, Inc. from Ree Min Limited, Ree Jia Limited, Ree Jie Limited, Ree Lin Limited, Ree Zhi Limited and Ree Fen Limited in May 2016.