New add another Chinese co: CSCT 11.17 +.37 news out today: China Security & Surveillance Technology, Inc. Signs Letters of Intent to Acquire Two Key Chinese Security Companies
PR Newswire - December 26, 2006 8:30 AM (EDT)
Press Conference Scheduled for December 28th - Acquisitions Will Complement Company's Ability to Secure Additional City-Wide Safety Projects
SHENZHEN, China, Dec 26, 2006 /PRNewswire-FirstCall via COMTEX/ -- China Security & Surveillance Technology, Inc., "China Security" (OTC Bulletin Board: CSCT), a leading provider of digital surveillance technology in China, announced today that it will host a press conference on December 28, 2006 in Shenzhen to officially announce its intention to acquire two Chinese security and surveillance companies.
Non-binding letters of intent ("LOIs") have previously been signed with Shenzhen Hongtianzhi Electronics Co., Ltd ("Hongtianzhi") and HighEasy Electronic Technology ("HighEasy") and preliminary due diligence has been completed on both companies by China Security.
Hongtianzhi is currently one of China's top security camera manufacturers. The acquisition is expected to bolster China Security's presence in the domestic market by making it one of the only vertically integrated providers, while also facilitating the Company's planned expansion into new international markets. Hongtianzhi is expected to record approximately $12 million in revenues and $3 million in net income for 2006. Management anticipates revenues from the Hongtianzhi business to grow to approximately $20 million for 2007.
HiEasy is based in Wuhan and will provide China Security with advanced compression technology to enhance the Company's product offerings and user functionality by facilitating video and audio transmissions over telecommunications infrastructure networks. Additionally, the acquisition will provide increased efficiency related to the Company's current DVR system as data will be compressed more effectively and seamlessly across the Company's entire product suite. HiEasy is expected to record approximately $3.2 million in revenues and $0.65 million in net income for 2006. Management expects revenues relating to the HighEasy business to grow to approximately $5 million in 2007.
Both companies have been awarded the top 50 enterprises in the security industry by the China Security & Protection Industry Association (CSPIA), a designation China Security also enjoys.
The purchase price for HiEasy and Hongtianzhi is expected to be approximately $10 million and $30 million, respectively, with half of the consideration in cash and half in restricted common stock. Both companies are expected to be subject to a "make good" provision based upon future net income thresholds. HiEasy's management is committing to net income of approximately $0.65 million for 2006 and approximately $1 million for 2007. Hongtianzhi's management is committing to net income of approximately $3 million for 2006 and approximately $4 million for 2007. The net income contribution expected from these acquisitions was not factored into the "make good" obligation that China Security has with certain of its investors. Under the terms of that "make good" China Security has targeted net income for 2007 of $34.1 million.
The acquisition is subject to entry into definitive purchase agreements, final due diligence and the receipt of governmental approvals. In connection with these proposed acquisitions, the financial statements of the target companies are being converted to US GAAP, and thus financial results stated in this press release are subject to change. Further details relating to the acquisitions, including audited numbers for the target companies, will be disclosed at or around the time of the closing of the acquisition of the target companies
"These two acquisitions further enhance our technology platform, product offering and competitive advantages," commented Mr. Tu Guo Shen, Chief Executive Officer of China Security. "By further differentiating our Company and becoming a vertically integrated player, we believe these complementary additions will enable us to secure future City-Wide Safety Projects while providing an entrie' into the international markets, two factors which we believe will drive incremental growth and margin enhancements for the new combined entity."
About HiEasy Electronic Technology Development Co. Ltd:
HiEasy based in Wuhan in the PRC was founded in 2001. The Company is a leading provider of advanced compression technology used to enhance video and audio transmissions over telecommunications infrastructure. HiEasy also possess technology that facilitates the compression of data over a DVR system.
About Shenzhen Hongtianzhi Electronics Co., Ltd:
Shenzhen Electronics was founded in 2001. The Company is currently one of the top security camera system manufacturers in China. Hongtianzhi engages in R&D, manufacturing and distribution of video cameras, digital video cameras, picture splitters, lenses and monitors. Over 50% of company's products are exported to more than 20 countries, including USA, India, Brazil, Australia, Canada, Italy, German, United Arab Emirates, Singapore and Taiwan.
About China Security & Surveillance Technology, Inc.
Based in Shenzhen, China, China Security through its subsidiaries manufactures, distributes, installs and maintains security and surveillance systems throughout the PRC. China Security has a manufacturing facility located in Shenzhen and a R&D facility which leverages an exclusive collaboration agreement with Beijing University. In addition, China Security has built a diversified customer base through its extensive sales and service network that includes 37 points of presence throughout the PRC. To learn more about China Security, visit their website at: csstf.com.
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of China Security and its subsidiary companies, which can be identified by the use of forward looking terminology such as "believes, expects" or similar expressions. The forward looking statements contained in this press release include statements regarding the ability of HiEasy Electronic Technology Development Co. Ltd. and Shenzhen Hongtianzhi Electronics Co., Ltd. acquisitions to enhance China Security's core operations and provide technological and cross selling benefits, the expectation that the acquisition will be accretive to earnings and revenue and both companies ability to meet the disclosed Make Good targets for 2006 and 2007. Such forward looking statements involve known and unknown risks and uncertainties, including, but are not limited to, general business conditions, managing growth, and political and other business risk. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks and other factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Security and Surveillance Technology Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.
SOURCE China Security & Surveillance Technology, Inc.
Company: Terence Yap of China Security & Surveillance Technology, Inc.,
+1-646-713-4888, terence@csstf.com, or Investors: Matt Hayden of Hayden
Communications +1-858-704-5065, matt@haydenir.com, for China Security &
Surveillance Technology, Inc.
csstf.com
Hadn't noticed this one before...tuna |
