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Hailu to buy stake in Jiangnan Integration
Posted on Friday, 19 May 2017 09:16
Suzhou Hailu Heavy Industry is stepping up its investment in the solar energy sector by acquiring 83.6 per cent of Ningxia Jiangnan Integration Technology (Jiangnan Integration) in a deal worth CNY 1.76 billion (USD 254.80 million).
The sellers, being the target’s chairman Wu Weiwen and Jubaohang Holding Group, will receive cash and an 11.6 per cent stake in the purchaser.
Jiangnan Integration specialises in the construction of power stations and partners with other solar companies like GCL-Poly New Energy and Zhongli Tenghui Photovoltaic Technology.
According to Zephyr, the M&A database published by Bureau van Dijk, this is Hailu’s largest deal announced so far.
The Shenzhen-based waste heat boiler maker is at the same time inviting no more than ten investors to subscribe for a CNY 759.60 million private placing, representing 14.7 per cent of its enlarged capital.
Hailu has appointed Shenwan Hongyuan Securities and Grandall Law Firm as advisors, while Jiangnan Integration is being assisted by Zhongxingcai Guanghua Certified Public Accountants and China United Assets Appraisal.
Closing of both transactions is subject to approvals from shareholders, the China Securities Regulatory Commission and the Ministry of Commerce.
As shown by Zephyr, the last time Hailu completed an acquisition was in 2015, when it bought environmental engineering firm Zhangjiagang Gerui from 19 shareholders for CNY 625.00 million.
The purchaser’s business took a battering last year due to a slowdown in China’s economic growth, according to its 2016 annual report.
It posted revenue of CNY 1.07 billion during the period, down 28.9 per cent on the CNY 1.50 billion recorded in 2015.
Net profit in 2016 was CNY 75.35 million, compared to CNY 84.80 million in the previous year.
According to Zephyr, there have been 27 announced or completed deals targeting utility system construction companies in China in 2017 to date, with the largest being Power Construction Corporation of China’s CNY 12.00 billion private placing, which completed last month.
© Zephus Ltd