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EX-10.1 - CHINA ELECTRIC MOTOR, INC. | v208932_ex10-1.htm |
EX-10.2 - CHINA ELECTRIC MOTOR, INC. | v208932_ex10-2.htm |
8-K - CHINA ELECTRIC MOTOR, INC. | v208932_8k.htm |
China
Electric Motor, Inc. Announces the Acquisition of
Shenzhen
Guofa Optoelectronics Co., Ltd.
--Company
Expands Position in High-End DC Micro Motor Category–
SHENZHEN,
China, January 25, 2011 -- China Electric Motor, Inc. (Nasdaq: CELM, "China
Electric" or the "Company"), a Delaware corporation and China-based company that
engages in the design, production, marketing and sale of micro motor products,
today announced that Luck Loyal International Investment Limited (“Luck Loyal”),
an indirect wholly owned subsidiary of the Company, entered into an Equity
Transfer Contract (the “Agreement”) with New-Metal (H.K.) Technology Limited
(the “Seller”) on January 21, 2011. Under the terms of the Agreement, Luck Loyal
will purchase 100% of the equity interests of Shenzhen Guofa Optoelectronics
Co., Ltd. (“Guofa Optoelectronics” or “Guofa”), a wholly foreign owned
enterprise incorporated in China, held by the Seller, for an aggregate purchase
price of RMB42.7 million (or approximately US$6.5 million, based on the exchange
rate as of January 21, 2011) (the “Transaction”).
With this
acquisition, the Company will acquire new production lines and expertise focused
on high-end DC micro motors used in products like digital cameras, cell phones,
electronic door locks, and other similar products. Guofa’s products are sold to
clients representing high-end OEM companies which include Ricoh, Toshiba,
Philips, OMRON, Panasonic, OLYMPUS, and Taiwan Asia Optical. In 2010, Guofa
Optoelectronics recognized RMB83.4 million (or approximately US$12.7 million) in
revenue and RMB8.7 million (or approximately US$1.3 million) in net
income.
The
purchase price will be paid by the Company in three installments, subject to
certain conditions precedent and adjustments, as described in the
Agreement. For the first installment, the Company will pay RMB4
million (or approximately US$607,000) within ten days of the execution of the
Agreement. For the second installment, the Company will pay RMB28.7 million (or
approximately US$4.4 million) within thirty days of the Agreement after certain
conditions precedent have been met. The last payment of RMB10 million
(or approximately US$1.5 million) will be withheld as a deposit to secure the
settlement of labor issues, if any, as described in the Agreement. The closing
of the Transaction is expected to take place within 120 business days from the
date of the Agreement, subject to government approvals.
In
addition, Dr. Dehe Wang, the General Manager of Guofa Optoelectronics (no
relation to the Company's CEO, Mr. Yue Wang, or Chairman, Mr. Fugui Wang), has
been hired to replace Mr. Shengping Wang, who resigned due to medical reasons,
to become the Company's new Chief Technology Officer, effective as of January
21, 2011. Mr. Dehe Wang has been the General Manager of Guofa
Optoelectronics since November 2005 and has over 15 years of management and
research experience in the micro motor industry.
Mr. Yue
Wang, the Chief Executive Officer of China Electric, stated, "This acquisition
further establishes our presence in the high-end DC micro motor
category. Guofa has a blue chip customer base and serves markets in
which we currently have no presence. Part of our strategy over the
past two years has been to diversify our overall product offering
beyond home and kitchen appliances. Guofa has an established
customer base and a strong product portfolio in niche areas like camera printing
machines and automobile door lock motors, which help with our diversification
efforts.
We plan
to consolidate Guofa’s operations and over 450 skilled employees to our newly
acquired Sunna Industry Park after the closing of this
transaction. We expect Guofa to be accretive immediately upon the
closing of this acquisition and we believe that we can maximize Guofa’s sales
and profit growth in the coming years through our working capital
commitments.”
Wang
continued, “We greatly appreciate Mr. Shengping Wang’s tremendous contribution
to China Electric’s growth and we are excited to welcome Mr. Dehe Wang to the
China Electric team. We believe that his appointment, combined with
our acquisition of Guofa Optoelectronics, will significantly help us continue to
expand China Electric’s micro motors footprint.”
About
China Electric Motor, Inc.
China
Electric Motor, Inc. (Nasdaq: CELM) is a China-based company that engages in the
design, production, marketing and sale of micro motor products through its
subsidiaries, Shenzhen YuePengCheng Motor Co., Ltd. and Ningbo Heng Bang Long
Electrical Equipment Co., Ltd. The Company's products are incorporated into
consumer electronics, automobiles, power tools, toys and household appliances,
and are sold under its "Sunna" brand name. The Company provides micro motor
products that meet the growing demand for efficient, quiet and compact
motors from manufacturers of consumer electronics, automobiles, power
tools, toys and household appliances. China Electric Motor, Inc. sells its
products directly to original equipment manufacturers and to distributors and
resellers both domestically in the People's Republic of China and
internationally to customers in Korea and Hong Kong. The Company's manufacturing
facilities are located in Shenzhen, Guangdong and Ningbo, Zhejiang.
Safe
Harbor Statement
This
press release of China Electric Motor, Inc. ("China Electric," the "Company,"
"we," "us" or "our") contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that involve risks, uncertainties and assumptions. All
statements other than statements of historical fact in this press release are
forward-looking statements, including but not limited to, our future financial
condition or results of operation, the completion and expected benefits of our
planned expansion, the ongoing growth in the sales of our products and our
product lines, our access to new markets, our ability to recruit and retain
high-quality employees, the success of our growth strategies and the continuing
growth of the Chinese economy and Chinese exports. These forward-looking
statements are based on management's current expectations, assumptions,
estimates and projections about the Company and the industry in which the
Company operates, but involve a number of unknown risks and uncertainties,
including, without limitation, our ability to sustain our recent profitability
and growth rates, the possibility that we may not meet production demands and
standards at a reasonable cost, increased competition in the micro motor product
market, our ability to develop and sell new products or penetrate new markets,
our ability to timely bring additional production capacity on line, our ability
to maintain and fill order backlog, the success of our strategic investments and
acquisitions, our ability to timely develop new production equipment, compliance
with and changes in the laws and policies of the People's Republic of China that
affect our operations, including its economic policies and other risk factors
detailed in our Annual Report on Form 10-K for the fiscal year ended December
31, 2009 and in our subsequent reports on Form 10-Q filed with the Securities
and Exchange Commission and available at www.sec.gov . The Company undertakes no
obligation to update forward-looking statements to reflect subsequent occurring
events or circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that the expectations expressed
in these forward-looking statements are reasonable, it cannot assure you
that such expectations will turn out to be correct, and actual results may
differ materially from the anticipated results. You are urged to consider these
factors carefully in evaluating the forward-looking statements contained herein
and are cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by these cautionary
statements.
Contact
Information:
In
China:
Dexter
Fong, CFO
China
Electric Motor, Inc.
Tel: +86
136 6666 1663
Email:
dexterfong@gmail.com
ICR,
LLC.
Jeremy
Peruski
Tel: +86
10 6583 7508
Email:
Jeremy.peruski@icrinc.com