Zoom Technologies, Inc.
ZOOM a leading designer and manufacturer of mobile phones and
consumer electronics, announced the execution of a definitive agreement
pursuant to which it will sell its China-based manufacturing, sales and
marketing, and R&D subsidiaries, and that the proceeds of the sale will be
used for the purchase of additional U.S.-based businesses.
On December 31, 2012, Zoom Technologies, Inc. ("Zoom" or the "Company")
entered into a Share Purchase Agreement with the Beijing Zhumu Culture
Communication Company, Ltd. (the "Purchaser"), a PRC company that provides
services to the telecommunication industry, for the sale to the Purchaser of
the Company's China based operations including: 100% ownership of Beijing
Nollec Wireless Company ("Nollec") – the R&D subsidiary, 80% ownership of
Tianjin Tongguang Group Digital Communication Company, Ltd. ("TCBD") – the
main manufacturing entity, 100% ownership of Profit Harvest Corporation, Ltd.
("Profit Harvest") – the sales & marketing company, and 100% ownership of
Celestial Digital Entertainment, Ltd. ("CDE") – the mobile game maker. As
consideration for the sale, the Purchaser shall pay the Company an aggregate
of Rmb 200 million, equivalent to approximately US$32 million. The purchase
price is, subject to adjustment pending an appraisal by an independent third
party appraiser. As of the date of the Share Purchase Agreement, the Purchaser
has deposited the full amount of RMB 200 million into an escrow account, to be
released to the Company upon the final closing of the Sale, which will be held
30 days after the Company receives all the requisites corporate and regulatory
approvals with respect to the Sale.
The Company's ownership interest in SpreadZoom Technologies Co., Ltd., which
owns and operates mobile phone manufacturing facilities in Tianjin and which
is a joint-venture between the Company and Spreadtrum Technologies, Inc., is
not part of the sale.
The final closing of the sale of the above-mentioned subsidiaries of the
Company is anticipated to take place within the first quarter of 2013 with the
exception of Profit Harvest which closing occurred as of December 31, 2012. In
addition, the Company will, through Portables Unlimited, LLC, its U.S. based
subsidiary, continue to operate the exclusive wholesale distributor business
for T-Mobile products and services in the United States.
The Company intends to use the cash proceeds from the sale of the assets to
acquire similar businesses in the U.S. to further expand its activities there,
including but not limited to the acquisition of additional licensed retail
stores that service T-Mobile USA.
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