Final fate! Kuaijietong plans to transfer 100% equity of Patonson for RMB 2.02 billion

At the beginning of 2021, the most important and out-of-the-box transaction in the cross-border industry shocked the entire cross-border circle. That is, Cross-border Communication plans to sell 60% of the equity of its subsidiary Paton. And an announcement from Cross-border Communication yesterday also finalized the deal, and the fate of Paton will end with the sale of 100% of its equity.

On the evening of March 23, Cross-Border Link issued an announcement stating that the company plans to transfer 100% of the equity of its wholly-owned subsidiary Shenzhen Qianhai Paton Network Technology Co., Ltd. (hereinafter referred to as Paton) to 20 transferees including Xiaomi, Shunwei, and CDH, with a transaction price of 2.02 billion yuan.

According to the announcement, the 20 specific targets participating in the transfer of Paton’s equity are Paton Investment, Yongpa Investment, Yongxun Investment, Pachi Investment, Pazhong Investment, Xiaomi Technology Co., Ltd., ACHIEVER VENTURES III (HONG KONG) LIMITED, Yiwei Yihang, Maibu Investment, CDH (CDH Futao, CDH Yongfu), Jiajun Noron, Shaonianzhi, Quantum Leap, Xiyin International, Huangpu Chuangrong, Lan Yi Zhenxun, Yuanhe Investment, Payou Investment, Zhou Min, etc.

The equity ratios of each transferee and the corresponding transaction price are as follows:

It is learned that the book value of Paton's owner's equity is 676 million yuan, the value of all shareholders' equity is 2.018 billion yuan, and the valuation is 1.343 billion yuan higher than the consolidated book owner's equity. The parties confirmed the transaction price of 2.02 billion yuan. Based on this calculation, once the transaction is completed, Cross-border Communication will reap considerable investment returns.

Financial data shows that Paton's operating income in 2019 and from January to October 2020 was 3.439 billion yuan and 3.834 billion yuan, respectively, and its net profit was 178 million yuan and 285 million yuan, respectively.

Cross-border Communication said that this transaction is based on the company's development plan to reasonably adjust the company's business structure and to further meet the needs of the company's strategic development layout. It is expected that this transaction will increase the company's total profit in the 2021 consolidated statement by approximately RMB 770 million (this data is unaudited and does not take into account the impact of income tax).