Recently, Huanxu Electronics announced that Huanhong Electronics Co., Ltd., a wholly-owned subsidiary of the company, plans to establish a special purpose company (hereinafter referred to as “SPV Company”) in a joint venture with Ample Trading, Co., Ltd. to acquire the automotive wireless business of Tyco Electronics Co., Ltd. at an overall valuation of $48 million.
It is understood that the total share capital of SPV is US $53 million, of which Huanhong Electronics contributed 75.1% and Ample Trading contributed 24.9%. SPV acquired the TE Automotive Wireless business of Tyco Electronics Ltd. (hereinafter referred to as “Tyco Electronics”), with an overall valuation of US $48 million, The actual acquisition price will be paid in cash based on the overall valuation of the underlying business and adjusted based on the actual net debt and working capital levels of the underlying business on the delivery date.
For the purpose of this transaction, Huanxu Electronics stated that the company has accumulated many years of experience in communication module design and manufacturing. To deepen the layout of Internet of Vehicles products, optimize the customer structure and increase the number of customers, and achieve a business layout that extends from modules to system solutions.
According to the announcement, Tyco Electronics Co., Ltd.’s automotive wireless business is mainly engaged in the research, development, design, and production of automotive antennas, tuners, and on-board communications related products, and provides customers with complete solutions.
The target business is mainly focused on serving customers in Europe and maintaining long-term product development partnerships with customers. In North America and Asia Pacific, there are also professional teams that provide product development services and product debugging based on customer needs.https://store.stoneitech.com/
According to the evaluation and review opinion issued by the independent accountant Guofu Haohua United Accounting Firm on the valuation of the underlying business, it is believed that the valuation result of the underlying business is between US $464 million and US $572 million, which is still within a reasonable valuation range. This time, Huanxu Electronics plans to invest based on the overall enterprise value of US $48 million, according to the shareholding ratio obtained (with control rights), and then adjust the transaction price in accordance with the contractual provisions. The enterprise value falls within the aforementioned valuation range, which is reasonable and appropriate.
