HeNan Smart Food Co., a Chinese noodle maker, is to be sold to China Discovery Acquisition Corp., a holding company based in the Cayman Islands.

The part-cash, part-shares deal was announced yesterday (14 April) and will see China Discovery pay US$3m in cash for the privately-owned business, as well as issue 14.7m shares in its own company.

Under the deal, HeNan Smart Food Co.‘s current shareholders will own around 67.4% of the basic shares outstanding in China Discovery. 

HeNan Smart Food Co.‘s current shareholders will also own 60.3% of the fully diluted shares outstanding in the pro-forma company.

The noodle maker’s chairman and founder Youli Wang said the company was “very excited” about the deal with China Discovery.

“This transaction will allow us to augment our management team with broader international and industry experience. Moreover, with more flexible access to US capital markets, we expect to rapidly strengthen our competitive position,” Wang said.

China Discovery, which was et up to acquire a business with its main activities in China, said the noodle maker, which makes noodles under brands including Si Yuan and Si Mei Te, had “impressed” with its understanding of the market and competitiveness.

“The company is very well positioned to grow,” China Discovery COO Beatrice Hom said.