Electric and motor scooter manufacturer and distributor Vmoto says it will purchase Nanjing Haiyong Electronic Technology for an undisclosed amount, overwriting an earlier proposal to enter into a joint venture arrangement with the China-based tech firm in October last year.
Electric and motor scooter manufacturer and distributor Vmoto says it will purchase Nanjing Haiyong Electronic Technology for an undisclosed amount, overwriting an earlier proposal to enter into a joint venture arrangement with the China-based tech firm in October last year.
Vmoto said a key benefit of the purchase would be to have direct access to electric vehicle technologies central to its electric driving system, as well as opening a door to the Chinese electric three-wheel and four-wheel vehicle markets.
Vmoto said the acquisition is valued at five times Haiyoung’s earnings for the year ended December 31 2013, in which it made a net profit of $752,667.
“We have been working with Haiyong for over 18 months and both companies have put a lot of effort into understanding the synergies of bringing the two entities together,” Vmoto managing director Charles Chen said.
“Funded through the issue of Vmoto equity, Vmoto will continue to maintain a strong balance sheet, and the acquisition is expected to be earnings accretive from FY 2015.”
Following the acquisition, Haiyong controlling shareholder Haisheng Zhang will be appointed managing director of the Chinese division.
Vmoto’s share price closed unchanged at 4.7 cents per share.
