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Zhongjing Electronics intends to acquire Founder for 286 million yuan to increase flexible circuit boards
2021-09-30
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Author:Downs

After trading suspension for three months, the M&A plan of Zhongjing Electronics was finally unveiled: the company plans to acquire 100% of the shares of the flexible circuit boardcompany Hunan Zhengda at a total price of 286 million by issuing shares and combining cash, and is entering the flexible printing industry. The circuit board (FPC) industry has another success on the road. Although the transaction plan did not disclose the past financial data of the acquisition target, it promised that the net profit from 2014 to 2016 was not less than 28 million yuan, 34.6 million yuan and 41.14 million yuan, respectively.

  

The announcement shows that the company intends to issue 27.57 million shares to Hunan Zhengda shareholders Fang Xiaoqiu and Lan Shunming at 8.83 yuan per share, and to pay 42.5569 million yuan in cash to purchase 100% of its shares in Founder, of which the non-public offering The proportion of share-based payment is over 85%, and the proportion of cash-based payment is nearly 15%.

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 At the same time, Zhongjing Electronics intends to raise supporting funds of no more than 95,320,500 yuan for non-public issuance of shares to no more than 10 other specific investors, which will be used to pay cash considerations and intermediary fees. The issue price is 7.95 yuan per share. The number of shares is approximately 11.99 million shares. Yang Lin, the actual controller of Zhongjing Electronics, will subscribe no more than 30% of the issued shares.

  

According to the data, Founder's current main business is the R&D, production and sales of flexible printed circuit boards (FPC) from RZT. It is a leading enterprise in the FPC market for LED energy-saving lighting. According to preliminary estimates by the appraisal agency, the estimated value of Founder's 100% equity is 286 million yuan. The transaction plan did not disclose Founder's financial data, but promised that the net profit for 2014-2016 will not be less than 28 million yuan, 34.6 million yuan and 41.14 million yuan respectively. If the cumulative value of the actual net profit for the three years is higher than the cumulative value of the predicted net profit, 30% of the excess can be rewarded to the key management personnel and core technical personnel who will be in position at the time of Founder.

  

FPC, as a substrate and key interconnection for electronic parts, covers a wide range of downstream industries, involving general consumer electronics, information, communications, medical, optoelectronics, and even aerospace products. Affected by the rise of new downstream electronic consumer products, it is estimated that the global FPC output value will reach 13.245 billion U.S. dollars by 2016, accounting for 18.4% of the global printed circuit board (PCB) output value. The growth rate of FPC ranks among all kinds of PCB products. Second, it has become one of the PCB varieties with the fastest growth rate in future market demand.

  

In the LED segment where Founder is located, the scale of China’s LED lighting market in 2013 was about 32.4 billion yuan, a growth rate of 36%. It is estimated that by 2020, China’s actual LED general lighting demand will reach 138.6 billion yuan, which is expected to become the world’s largest LED consumer country. According to data from IMS Research, the global LED lighting industry market penetration rate will reach 35% in 2015, and the market size will reach US$43 billion.

  

According to Zhongjing Electronics, the company is facing many adverse effects such as shrinking overseas market demand, fierce competition in the domestic market, and rising costs, and is further increasing its product share in the mid-to-high-end PCB market to ensure the sustainable development of the company's main business. In the future, the company will make full use of its capital advantage after listing to accelerate the implementation of fund-raising investment projects and enhance the company’s profitability. It also hopes to enrich the company’s PCB product line through industrial integration in the industry, continuously adjust its product structure, and enhance the company’s overall competition. ability.

  Last year, Zhongjing Electronics began to get involved in flexible circuit boards. After the establishment of the Shenzhen branch, it announced an investment of 280 million yuan to build an FPC (flexible printed circuit board) project with an annual output of 360,000 square meters.