China Technology Holdings plans to acquire a 51% stake in British gaming company for Internet Entertainment by 1.6 billion

on the evening of September 12, China Technology Holdings released a draft report on major asset purchases and related party transactions, intending to buy 26 per cent and 25 per cent of the shares held by Pindi and HTC respectively for 1.632 billion yuan in cash, adding up to 51 per cent of HTC.

original title: China Technology Holdings, which is fond of overseas quality, intends to acquire 51% of UK game leader

on the evening of September 12, China Technology Holdings released a draft report on major asset purchases and related party transactions. It is proposed to use 1.632 billion yuan in cash to purchase 26% and 25% of the shares of HTC and HTC respectively. It adds up to a 51% stake in Macro Investment Network.

in the past three years, game M & A has shown a blowout growth. According to the 2015 domestic Game Industry financing report, the amount of mergers and acquisitions involved in the game industry was 18.8 billion yuan in 2013 and 25.3 billion yuan in 2014, and last year the amount involved in mergers and acquisitions of game companies reached a new high of 61.5 billion yuan. this figure is far more than the previous two years combined.

two months ago, China Technology Holdings released a draft of a major asset sale, saying it would spin off its traditional main business, precast concrete piles, and then buy assets from overseas high-quality gaming companies.

it is reported that the core of the assets held by Macro Investment Network is Jagex Game Company, which owns 100% of the company. The company is one of the largest developers and publishers of online games in the UK. So far, its core game Rune Scape series has a total of 249 million registered users, mainly from Europe and the United States, 2 million people participate in the game every month, and millions of viewers watch the game through social platforms.

China Technology Holdings said the consideration for the 51 per cent stake in the acquired Macro Investment Network was 1.632 billion yuan. According to the income statement, in 2015, the operating income of Hongzhou Investment Network reached 556 million yuan, with a net profit of 220 million yuan. Its huge income comes from the money-attracting ability of Jagex, which currently accounts for 64.6% of its member income. RuneScape NEXT, Chronic CCG and other derivative games developed around the RuneScape game series are selling well. Under the current general trend of the rapid development of mobile online games, Jagex plans to develop new game categories with IP, and expand it to mobile game platforms other than PC.

the acquisition has also arranged performance compensation measures. According to the Asset Evaluation report issued by Lixin Evaluation, the profit forecasts of Jagex2016 excluding non-recurring profits and losses from July to December, 2017 and 2018 are 101.239 million yuan, 296.6987 million yuan and 323.1953 million yuan respectively. Liang Xiuhong, the actual controller of HTC, shall not exceed the total transaction consideration obtained by HTC in this transaction (that is, 800 million yuan) to undertake performance commitment compensation and impairment test compensation.

for the acquisition method of holding only 51%, SinoTech Holdings explained that the adoption of shareholding rather than wholly-owned acquisition will help the company to save capital investment and control investment risk, and gain control over the acquired enterprise at as little cost as possible. In the next step, the company will make reference to the future profit situation and market prospects of the Macro Investment Network to acquire the remaining 49% stake in the Macro Investment Network.

with regard to the significance of entering the game market this time, China Technology Holdings said in the announcement that the related business of prestressed centrifugal concrete piles with uncertain future development prospects will be put out to engage in Internet entertainment business with strong profitability and broad prospects, which will help to realize the transformation of the main business of listed companies, enhance the company's sustainable profitability and development potential, and improve the company's asset quality and sustainable profitability.

Edit: nancy