Expand the Intelligent Lock Sector, Topstrong Proposed to Wholly Owned Control of Kaadas

Night on December 24, Topstrong set announcement, the company through issuing shares and pay cash to buy Su Qiyun, Jiang Niangen, hai-qing xu, Li Guangshun, shenzhen built xinyuan TouDai linkage to equity investment fund partnership (limited partnership), shenzhen brought kay enterprise management partnership (limited partnership) jointly held shenzhen Kaadas intelligent technology co., LTD. (hereinafter referred to as "Kaadas") for a 96.2963% stake.

Prior to this transaction, Topstrong jichuang held 3.7037% of the equity of Kaadas. After the completion of this transaction, Topstrong jichuang will hold 100% of the equity of Kaadas.At the same time, the company intends to issue shares to no more than 5 other specific investors by way of inquiry (or determine the number of objects to be issued in accordance with applicable laws and regulations at the time) to raise supporting funds, and the total amount of supporting funds shall not exceed 380 million yuan.

Taking September 30, 2019 as the appraisal base date, the appraisal value of 100% equity of caldis by income method is 1.28 billion yuan, which is 954 million yuan more than the net book value (consolidated ownership of the parent company's equity) of 326 million yuan after auditing as of September 30, 2019, and the appreciation rate is 293.12%. The corresponding 96.2963% equity transaction consideration of Kaadas is set at 1.233 billion yuan.

According to the announcement, 70% of the transaction consideration, or 863 million yuan, will be paid by issuing shares. Pay 30% of the transaction consideration in cash, i.e. 370 million yuan, and issue shares to purchase assets at 13.66 yuan/share.

Topstrong jichuang is mainly engaged in the r&d, production and sales of customized wardrobes and supporting furniture, high-quality goods hardware, intelligent hardware (including smart door locks), customized ecological doors and other products. Kaadas is mainly engaged in the research and development, production and sales of intelligent door lock products, with strong r & d and design capabilities and perfect sales channels and after-sales service resources, in the intelligent door lock market is in a leading position.

Topstrong jichuang said, this transaction will enrich the company's smart door lock product series, enhance the company's position in the smart door lock market and influence, to provide customers with more intelligent, customized home products and services, conducive to the realization of the company's development strategy. In addition, the listed company and Kaadas can realize the complementary advantages of both sides, give play to the synergies in sales channels, service resources, production and technology, and jointly grasp the development opportunities of the smart home market, make the company's business bigger and stronger, and enhance the value of the listed company.

In addition, this transaction intends to acquire the target company katishi has good profitability and development prospects, which will have a positive impact on the profitability of listed companies. Secondly, katishi is a leading enterprise in the intelligent door lock market and has a strong competitive advantage. Thirdly, in recent years, the business scale and profitability of katishi continued to develop rapidly.

After the completion of the transaction, Kaadas will become a wholly-owned subsidiary of the listed company, which will be included in the consolidated statements of the listed company. The revenue scale and profitability of the listed company will be significantly improved, which is conducive to enhancing the continuous profitability and anti-risk ability of the listed company, and conforms to the interests of the shareholders of the company.

According to the performance commitment compensation agreement signed by both parties, the net profit of Kaadas in 2020, 2021 and 2022 shall be no less than 108 million yuan, 123 million yuan and 135 million yuan respectively.

The agreement states that if the cumulative net profit realized within the first two years of the target company's performance compensation period after deducting non-recurring profits and losses does not reach the cumulative promised profit of the current year but not less than 90% of the cumulative promised profit of the current year, the performance compensation obligation of the compensation obligor will not be triggered in the current year. However, the accumulated net profit after deducting non-recurring profits and losses realized in the third year of the performance compensation period shall reach 100% of the accumulative commitment profit of the current year, otherwise the performance compensation obligation of the compensation obligor shall be triggered.

Topstrong set chong said the agreement negotiated by the listed company and performance commitments, to avoid in the underlying asset in the actual net profit and performance commitments were small startup performance under the condition of compensation programs, is conducive to maintaining the stability of the target company's business, promote the steady development of the target company, ensure the implementation of the results promised.

According to the above performance commitment arrangement, if the net profit of the underlying assets in 2020, 2021 and 2022 is less than the sum of commitments, the performance promisee shall make compensation.