China Agritech (CAGC) $15M Private Offering with Carlyle Asia Growth Partners

October 20, 2009 7:07 AM EDT

China Agritech, Inc. (NASDAQ: CAGC) 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.

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.

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