TOLUCA LAKE, Calif. & HONG KONG - Iron Horse Acquisitions Corp. (NASDAQ: IROH), a special purpose acquisition company, has announced a definitive business combination agreement with Rosey Sea Holdings Limited, the parent company of Zhong Guo Liang Tou Group Limited, also known as China Food Investment (CFI). The transaction, which is expected to close in the first quarter of 2025, will result in CFI becoming a wholly owned subsidiary of Iron Horse, with plans to rename Iron Horse to China Food Investment.
The merger is expected to create a health and agricultural biotechnology food products company with an emphasis on green and healthy food consumption. CFI, which operates through subsidiaries in Hong Kong, PRC, and Mainland China, is in the process of expanding its commercial reach with the goal of becoming a leading online-offline health foods sales group in Asia and internationally.
The business combination values the combined entity at an estimated post-transaction enterprise value of $523 million. The deal is contingent upon certain closing conditions, including regulatory approvals and Nasdaq approval.
Mr. Sean Jiang, Chairman of CFI, expressed optimism about the merger bringing significant growth opportunities for CFI's product line. Jose A. Bengochea, CEO of Iron Horse Acquisitions, also conveyed excitement for this first transaction in the Iron Horse family of SPACs.
EF Hutton LLC served as the sole book running manager for Iron Horse's initial SPAC offering and as Capital Markets Advisor to Iron Horse for this transaction. Lucosky Brookman LLP is acting as legal counsel to Iron Horse.
The proposed business combination will be detailed in a forthcoming registration statement and/or proxy statement, which will be made available to Iron Horse stockholders and filed with the SEC. Iron Horse and CFI encourage investors and stockholders to read these documents once available, as they will contain important information about the merger.
This press release is based on a press release statement and contains forward-looking statements that involve risks and uncertainties, including the possibility that the merger may not be completed as planned.
InvestingPro Insights
As Iron Horse Acquisitions Corp. (NASDAQ: IROH) prepares for its merger with China Food Investment (CFI), investors should consider some key financial metrics and insights provided by InvestingPro.
IROH's current market capitalization stands at $90.44 million, reflecting the market's valuation of the company prior to the announced merger. The stock's price-to-earnings (P/E) ratio is notably high at 67.85, which could indicate investor optimism about future growth prospects, particularly in light of the upcoming business combination.
An InvestingPro Tip suggests that IROH is "trading at a low P/E ratio relative to near-term earnings growth," with a PEG ratio of 0.72 for the last twelve months as of Q2 2024. This metric potentially signals an undervalued stock when considering its growth potential, which may be particularly relevant given the anticipated expansion into the Asian health foods market.
It's worth noting that IROH's stock "generally trades with low price volatility," according to another InvestingPro Tip. This characteristic might appeal to investors seeking stability, especially during the transition period of the merger.
However, potential investors should be aware that IROH currently "suffers from weak gross profit margins" and "short-term obligations exceed liquid assets," as highlighted by additional InvestingPro Tips. These factors could present challenges as the company moves forward with its ambitious plans.
For those interested in a more comprehensive analysis, InvestingPro offers 8 additional tips for IROH, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.