American Oriental Bioengineering, Inc. announced in its Q2 earnings announcement that it signed a letter of intent to acquire an unnamed China pharmaceutical distribution company. In the follow-up earnings call with analysts, management said that it would pay $110 million to purchase a company with $550 million in annual revenues. In response to questions, American Oriental refused to disclose the profitability of the company. However, the company did say that margins for the potential acquisition are “above the industry standard,” which is usually below 5%. The company also announced much higher revenues and profits in its Q2 report. More details...

Stock Symbol: (NYSE: AOB)