273 million to acquire LTK cable business
Wall Nuclear Materials announced today that the company intends to acquire 100% equity interests in Huizhou I, Huizhou II, Chongqing LTK, Dalian LTK and LTK International held by LTK Wire in cash at a price of 43.28 million US dollars (about 273 million yuan) through its wholly-owned subsidiary, Wal-Trade. As of June 30, the subject company's unaudited consolidated statement of net assets of 293 million yuan, the transaction price discount of about 20 million yuan.
The Daily Economic News reporter noted that the above first four companies are mainly engaged in consumer electronics cable business, the main customers for consumer electronics manufacturers. The main business of Le Ting International is trading, mainly responsible for the aforementioned companies wire and cable business of external procurement and sales. In 2009, LTI ranked second in the global consumer electronics cable market with a share of 16.9%.
Data shows that the Le Ting wire was founded in 1981, is the U.S. New York Stock Exchange-listed Paton wholly owned subsidiaries, and for the world's first to obtain UL, RoHS green certification of the cable manufacturers. The company has a consumer electronics cable, non-consumer electronics cable and trading three major businesses. After the sale of these companies to WNC, LTE still owns Suzhou LTE, which is engaged in non-consumer electronic cable business, and Paton Hussman, which is engaged in trading business.
Wall Nuclear Material said, the subject company has "LTK" brand, the brand has a high reputation in the industry. At the same time, the subject company's customer resources are more stable, Huawei technology for the company in recent years, the first major customer. In addition, the subject company's advanced technology, is one of the very few domestic manufacturers capable of producing AWG44 specification cable. Its related products comply with the U.S. UL certification standards, the EU RoHS Directive and Reach standards, to meet the environmental requirements for product exports. Through this transaction, the company can acquire well-known brands, access to cable customer resources, and accelerate the development of the company's wire business.
The subject company operation is worrying
However, from the announcement, the subject company's operation in recent years is not very optimistic, Volvo Nuclear Materials or face the operating results by the "drag" situation.
In 2010, 2011 and 2012 January to June, the five subject companies unaudited consolidated statement of income of 1.075 billion yuan, 1.047 billion yuan and 438 million yuan, net profit of 7.1970 million yuan, -40.1470 million yuan and -14.7702 million yuan. Among them, the operating condition of Huizhou No. 2 Company is slightly better, the company realized a net profit of $19,856,900,000 and $15,657,100,000 in 2010 and 2011 respectively, and the net profit in the first half of this year was $4,908,900,000. In addition, the remaining four companies are in the red this year, alone Le Ting International in January to June this year, a loss of 8.572 million yuan, occupying half of the loss.
Wall Nuclear Materials said that the subject company is subject to Baitong's globalization strategy and overseas management mode due to its operation and management, and the growth of operating income is basically stagnant, while the operating costs and expenses maintain a high level. At the same time, the subject company is required to share more than 20 million yuan per year for the hundred pass Asia headquarters management costs. All these reasons led to its poor operating performance. After the completion of the acquisition, the company will adjust the management strategy of these companies, expand the domestic market, control operating costs and expenses, as soon as possible to achieve its operating performance improvement.
It is worth mentioning that, due to the subject company's gearing ratio of 70%, the acquisition will make the Wal Nuclear Material's gearing ratio rose sharply from 26% to 45%. And as of June 30, wal nuclear material money funds for 191 million yuan, the company in the acquisition of funds still exists in the tens of millions of dollars of shortfall, which requires the company through refinancing to solve.