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Gulf Resources Secures Profitable Growth As It Purchases One Of Its Customers

Gulf Resources, Inc. (GURE) announced on Wednesday that it closed an equity interest transfer agreement with Shouguang City Rongyuan Chemical Co., Ltd [SCRC]. The purchase is for $66.2 million in cash and the issuance of 7,268,011 GURE shares to the owners of SCRC at a price of $2.00 for a total consideration of $80.7 million. The shares come with a five year lock-up period, ensuring that the former owners of SCRC remain committed to GURE's ability for long term success. GURE has now shown shareholders it can use cash to increase the value of the firm by buying a company at a very reasonable price and guaranteeing growth for 2015 while demand for bromine in China is soft.

The details of the transaction and expected benefits can be seen in this document filed with the SEC on January 14. SCRC is a manufacturer of materials for human and animal antibiotics… Read More …