CNinsure Announces Acquisition of Two Insurance Agencies
CNinsure Inc. (Nasdaq: CISG) today announced that it has entered into definitive agreements to acquire 100% equity interests in Guangzhou Huajie Insurance Agency Co. and Dongguan Zhongxin Insurance Agency Co., Ltd. from Chengdu Jingshi Investment Co., Ltd.. The transactions are expected to close in September 2011, subject to certain consents, authorizations and other customary closing conditions.
Both of the acquisition considerations for Huajie and Zhongxin are RMB25 million, representing a PE multiple of ten times based on their guaranteed net profits in 2012. Meanwhile, the Selling Shareholder agrees to provide 50% of the considerations to CNinsure as security deposits to guarantee the performance of Huajie and Zhongxin in 2012 and 2013. It also agrees to return certain portion of the considerations to CNinsure if Huajie and Zhongxin fail to achieve the performance targets in 2012 and 2013.
