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Kangsheng to purchase vehicle makers
Posted on Friday, 16 June 2017 10:47
Zhejiang Kangsheng (Kangsheng) is acquiring Zhongzhi Yike Chengdu Car (Yike) and Yantai Shuchi Bus (Shuchi) via two all-scrip transactions worth a combined CNY 1.48 billion (USD 217.53 million) to expand in the vehicle manufacturing sector.
As consideration, the sellers will receive 12.0 per cent of the buyer’s enlarged capital, effectively retaining exposure to the target upon closing.
This is Kangsheng’s largest acquisition to date, according to Zephyr, the M&A database published by Bureau van Dijk.
Yike is a manufacturer of new energy buses and vans and currently operates as a wholly-controlled subsidiary of Zhongzhi New Energy Vehicle, which also part owns Yantai Shuchi Bus.
The Shandong-based bus maker is held by 46 other individual shareholders, including Yu Zhongguo, Sun Jinglong and Wang Tongwu.
Kangsheng is concurrently inviting no more than 10 investors to subscribe to a private placing worth up to CNY 1.26 billion, representing 9.3 per cent of its enlarged capital.
Closing of the two transactions is subject to approvals from shareholders, the Ministry of Commerce and the China Securities Regulatory Commission.
The announcement comes just over five months after the buyer successfully took over 17.6 per cent of microfinancing provider Hangzhou Qiandaohu Kangsheng for around CNY 35.60 million.
Listed on the Shenzhen SME Board, Kangsheng manufactures air conditioner parts, such as cooling tubes and evaporators.
It employs over 10,000 staff members and has a presence in over 10 major Chinese locations, including Beijing, Jiangsu and Zhejiang.
Kangsheng posted revenue of CNY 2.81 billion in the 12 months ended 31st December 2016, up 28.8 per cent on the CNY 2.18 billion recorded in the previous year.
Net profit for the period totalled CNY 190.81 million, compared to CNY 90.37 million in 2015.
© Zephus Ltd