Knobias Clip Report (12-29-2008) CHCG
Submitted By Knobias ClipReport
CHCG: Agreement to Acquire Jinhua Baofa Logistic Ltd. in Eastern China
By Fain Hughes, fhughes@knobias.com
China 3C Group (CHCG) has signed a definitive agreement to acquire 100% of Jinhua Baofa Logistic Ltd., a logistic company in Eastern China, through its subsidiaries Zhejiang Yong Xin Digital Technology Co., Ltd. and Yiwu Yong Xin Communication Ltd.
The total amount of consideration payable for this transaction is approximately US$17.4 million, with consideration to be paid all in cash. The Company expects to complete the transaction by March 31, 2009.
Jinhua Baofa Logistic Ltd is a transportation logistics company in Eastern China and has been a long time transportation provider for China 3C Group. Jinhua has been in operation since 2001 and employs approximately 350 people. Jinhua has around 280 customers and operates a fleet of more than 70 trucks and transports freight including electronics, machinery and equipment, metal products, chemical material, garments and handicraft goods, in more than 20 cities in Eastern China. Its transportation service covers many of the most developed cities in the Eastern China region such as Shanghai, Hangzhou and Nanjing. Mr. Hongfei Guo, CEO of Jinhua, will continue to manage the business following the closing of this acquisition
For the nine months ended September 30, 2008, Jinhua had sales of approximately $7.85 million, net income of approximately $1.69 million and gross margin of 32.2%. In 2007, Jinhua had revenue of approximately $2.7 million, net income of approximately $287,000, and gross margin of 28.4%. This acquisition is expected to be accretive immediately upon closing.
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