Manufacturer Dragon-Tex Ltd and its subsidiary South Champ Trading Ltd are to buy textile dyer River Richie for $1.9 million.

South Champ, through which Dragon-Tex does all of its business, produces and sells woven fabrics, and trades children's wear and cotton yarn.

Under the deal, South Champ will acquire all of Hong Kong-based River Richie's shares, and will give 1.2 million Dragon-Tex shares to River Richie's shareholders.

River Richie has a capacity of around 1.2m square metres per month and reported a profit of $583,000 in its last fiscal year.