has been going around for nearly a year, and the popular big IP "Talking Tom Cat" has finally traveled across the ocean to play in the A-share market. Although Zhejiang Jinke Culture (12.700, -0.58, -4.37%) Industry Co., Ltd. (referred to as "Jinke Culture"), which brought it back, is not well-known, it is trying to complete the "Level 3" within just two years of listing. Jump".
On September 13, 2017, the details of an acquisition that had been in operation for nearly a year finally came out. Jinke Culture, which started in the chemical industry, announced that the company plans to non-publicly issue shares to six counterparties, Zhu Zhigang, Wang Jian, Shangyu Hangtian, Shenzhen Linfeng, Xu Bo, and Shangyu Zhuque, to purchase Hangzhou Doubao held by it. 100% equity and 100% equity of Shangyu Ma Niu, with a total transaction consideration of 4.2 billion yuan. The main assets of Hangzhou Doubao and Shangyu MaNiu are their combined 56% stake in Outfit7, and Outfit7 is the operating entity of the well-known IP "Talking Tom Cat".
It is worth mentioning that the most important part of this acquisition is an overseas M&A fund-United Good Luck. Two months after Jinke Culture announced its asset restructuring, United Good Luck raised US$1 billion in debt to acquire 100% of Outfit7's equity. Later, it indirectly transferred part of Outfit7's equity to Jinke Culture many times in the "Ant Moving" style. The true relationship between the two attracted the attention of regulators. On September 21, 2017, the Zhejiang Securities Regulatory Bureau asked Jinke Culture, “Please explain the final source and destination of the US$1 billion acquisition funds, whether your company participated in the acquisition arrangement of United Good Luck, and whether there is any transfer of relevant benefits. And provide corresponding bank statement details. "
In the secondary market, it can be seen from the stock price of Jinke Culture that investors do not seem to buy into this acquisition.
Jinke Culture cross-border transformation and 4.2 billion adoption of "Tom Cat"
Shen Guojun Company, CITIC Guoan (11.420, -0.05, -0.44%) and other companies participated in the private placement
On September 13, 2017, Jinke Culture announced that The company plans to purchase 100% of the equity of Hangzhou Doubao and 100% of the equity of Shangyu Ma Niu from a total of six counterparties, Zhu Zhigang, Wang Jian, Shangyu Hangtian, Shenzhen Linfeng, Xu Bo, and Shangyu Zhuque, through non-public issuance of shares. The transaction The total consideration is 4.2 billion yuan, while the transaction consideration of Hangzhou Doubao and Shangyu Ma Niu is both 2.1 billion yuan.
It is understood that the main assets of Hangzhou Doubao and Shangyu Ma Niu are their combined 56% stake in Outfit7. Outfit7 was founded in the UK in 2013. In addition to the well-known IP "My Talking Tom" for early childhood education games, Outfit7 currently operates products such as "My Angela", "Tom Parkour", "My Hank", etc. . Data show that Outfit7 had an average number of monthly active users of 233 million in 2015, 264 million in 2016, and 301 million from January to June 2017.
It is worth noting that among these six counterparties, there are many Shen Guojun, chairman of Intime Group, and CITIC Group. Tianyancha data shows that Shen Guojun is the largest shareholder of Shangyu Suzaku, with a subscribed capital of 700 million yuan and a shareholding ratio of 33.34%. Shangyu Zhuque is the largest shareholder of Shangyu Ma Niu, which Jinke Culture intends to acquire, with a shareholding ratio of 99.98%, and the remaining shares are held by Xu Bo. In addition, the controlling shareholder of Shangyu Hangtian is CITIC Guoan, and CITIC Group is the largest shareholder of CITIC Guoan, with a shareholding ratio of 20.94%.
In addition, this transaction also intends to use the price inquiry method to raise 311 million yuan in supporting funds from the non-public issuance of shares to no more than 5 specific investors, which will be used to pay the expenses related to the restructuring of intermediaries and to implement the "Talking Family" 》series IP operation center construction project in China and "Talking Family" series original cartoon production projects.
It is worth mentioning that after the completion of this transaction, Shangyu Zhuque controlled by Shen Guojun will become the fourth largest shareholder of Jinke Culture. If the 311 million yuan of supporting funds raised are taken into account, Shangyu Zhuque’s shareholding ratio will reach 9.75%, becoming Jinke Culture. important shareholder of culture.
In addition, if this transaction is completed, Jinke Culture will also complete a "triple jump" and transform from a chemical company into a well-known large IP operator.
Jinke Culture was listed on the Shenzhen Stock Exchange in May 2015. It was originally mainly engaged in the research and development, production and sales of oxygen bleaching auxiliary SPC.In 2016, it completed the acquisition of Hangzhou Zhexin and fully entered the field of mobile Internet cultural industry. At the same time, it actively develops the Internet early childhood education business through acquisitions and equity participation in Internet companies such as Xingbao Paradise. However, compared with "Talking Tom Cat", the cultural industry companies previously acquired by Jinke Culture pale in comparison.
html US$517,500 locked up 35% of the US$1 billion Outfit7 fund
57,000 times the "leveraged buyout" was subject to regulatory inquiries
Beijing time financial reporters noticed that before this transaction, Jinke Culture had acquired overseas mergers and acquisitions The fund indirectly acquired 35% of Outfit7's equity through 35% equity, but the capital paid was only US$17,500. The Shenzhen Stock Exchange and the Zhejiang Securities Regulatory Bureau even inquired about this and asked them to explain the pricing basis and fairness.
Why was Jinke Culture able to lock in a 35% stake in Outfit7, which is valued at US$1 billion, almost without any effort? "The key issue behind this is that in the first half of 2017, cross-border regulatory review has become more stringent and it has been difficult to transfer funds out of the country. This transaction, with a total scale of up to 1 billion U.S. dollars, has taken great pains to transfer funds out of the country." Analysts from the industry pointed out.
On October 25, 2016, Jinke Culture began to suspend trading and was planning to acquire the equity of Outfit7. Two months later, on December 28, 2016, United Good Luck, an overseas M&A fund that seemed to have nothing to do with Jinke Culture, acquired 100% of Outfit7 for a consideration of US$1 billion. Equity.
Not long after that, on January 12, 2017, Jinke Hong Kong, a wholly-owned subsidiary of Jinke Culture, acquired 10% of the equity of United Good Luck for US$5,000. On June 7, 2017, Jinke Hong Kong acquired another 25% stake in United Good Luck. The total price of the two acquisitions was US$17,500. In other words, Jinke Culture locked up 35% of Outfit7's equity at a "cabbage price" of US$17,500. Why is
so cheap? This is also a concern for regulators. Beijing time financial reporters noticed that United Good Luck is an overseas merger and acquisition fund registered in the British Virgin Islands, with a registered capital of only US$50,000. Its two major shareholders, Ou Yaping and CNBC, are both overseas individuals and entities.
Jinke Culture stated in its reply to the Shenzhen Stock Exchange’s inquiry letter, “Since the asset structure of United Good Luck is mainly 100% equity of Outfit7 and the liabilities formed to obtain the equity, the transfer price refers to the registered capital, which is US$1 per share. . Since Lianhe Good Luck is a newly established company with a registered capital of US$50,000, combined with the investor’s industrial background and the great business synergy between the two parties in the future, Lianhe Lianhe Luck will be priced based on the original registered capital after consensus reached by both parties. According to this, the equity transfer was the result of voluntary consultation and consensus between both parties. "
It is worth noting that in the above reply, "liabilities arising from the acquisition of the equity" appeared. In other words, United Good Luck’s acquisition of Outfit7’s equity was a debt acquisition. The financial data of United Good Luck also confirms this. As of the end of June 2017, United Good Luck's total liabilities were 7.568 billion yuan, which is similar to Outfit7's valuation of 1 billion yuan.
However, there are some details worth savoring. Where did the purchase price of United Good Luck come from? Why did you rush to transfer Outfit7 shares to Jinke Culture soon after acquiring the shares? Jinke Culture has announced a major asset restructuring, while United Good Luck is actively acquiring 100% of Outfit7's shares? Is there some correlation between the two?
In response to this, the Zhejiang Securities Regulatory Bureau asked Jinke Culture, "Please explain the final source and destination of the US$1 billion acquisition funds, whether your company participated in the acquisition arrangement of United Good Luck, whether there are related transfers of interests, and provide corresponding "
In this regard, a staff member of Jinke Culture's Board Secretary's Office told a Beijing time financial reporter, "Jinke Culture has no relationship with United Good Luck, nor did it participate in United Good Luck's acquisition of Outfit7's equity. The source of Lianhe Good Luck’s US$1 billion of funds is still unclear.
acquired
from two companies for US$299.6 million. It is worth noting that since December 28, 2016, Lianhe Lianhao has acquired
precisely. After Yun acquired 100% of Outfit7's equity for a consideration of US$1 billion, Outfit7's shareholders changed a lot.During
's acquisition of the equity of United Good Luck in Jinke Hong Kong, on May 24, 2017, United Good Luck established Lily and Ryuki in the British Virgin Islands and obtained registration certificates issued by the British Virgin Islands Companies Registry. On June 5, 2017, United Good Luck signed equity transfer agreements with Lily and Ryuki respectively, agreeing that United Good Luck would transfer 28% of Outfit7's equity to each of them free of charge.
Two months later, on August 10, 2017, United Good Luck transferred all its shares in Lily and Ryuki to Hangzhou Doubao and Shangyu Ma respectively for US$299.6 million (approximately 2.1 billion yuan). ox. The registered capital of both companies has also become 2.1 billion yuan. After that, the familiar Jinke Culture issued shares to acquire Hangzhou Doubao and Shangyu Ma Niu. After the completion of this transaction, Jinke Culture will indirectly hold 71.40% of Outfit7's equity.
It is worth mentioning that the equity ratio and acquisition amount of Outfit7 acquired by Hangzhou Doubao and Shangyu MaNiu showed signs of strict and precise calculation. Since this transaction is a cross-border merger and acquisition, it needs to be approved and filed by domestic regulatory authorities. "The acquisition amount of the corresponding shares of Outfit7 by Hangzhou Doubao and Shangyu Ma Niu happened to be less than 300 million US dollars, and they were registered with the National Development and Reform Commission and the Ministry of Commerce respectively. Domestic acquirers compressed the acquisition amount to less than 300 million US dollars, which can reduce the cross-border The review pressure of mergers and acquisitions,” the above-mentioned industry insiders believe.
Tom Cat is the "lucky cat"?
The value-added rate exceeds 16 times
The report disclosed by Jinke Culture shows that with June 30, 2017 as the evaluation base date, according to the evaluation results, Outfit7’s 100% equity evaluation value is 7.286 billion yuan, and Outfit7’s audited ownership The total owner's equity of shareholders of the parent company is 421 million yuan, the value-added amount is 6.865 billion yuan, the value-added rate exceeds 16 times, and the estimated value-added rate is relatively high
In terms of profitability, in the first half of 2017, 2016 and 2015, Outfit7's Operating income was 424 million yuan, 668 million yuan and 752 million yuan respectively, and net profits were 306 million yuan, 463 million yuan and 555 million yuan respectively.
According to the "Performance Compensation Agreement" signed between Jinke Culture and Zhu Zhigang and Wang Jian, Zhu Zhigang and Wang Jian, as profit compensation obligors, promised that the net profit of the underlying asset Outfit7 from 2017 to 2019 will not be less than 78.9004 million euros, respectively. 92.8668 million euros and 109.8 million euros, the cumulative net profit is equivalent to approximately 2.2 billion yuan.
Jinke Culture said, “After this transaction is reviewed and approved by the China Securities Regulatory Commission and completed, if Outfit7 fails to achieve the promised net profit in 2017, 2018, and 2019, Zhu Zhigang and Wang Jian agree to settle the matter in accordance with the agreement. Outfit7 will compensate for the shortfall in realized net profit from the promised net profit.”
From the perspective of revenue structure, the core revenue of “Tom Cat” comes from advertising. The company has embedded big data analysis and artificial intelligence technology, and the main revenue comes from mobile application products. Advertising business income, advertising business income accounted for 79.91%, 82.66% and 81.21% of operating income in the first half of 2017, 2016 and 2015, and the proportions were relatively stable. Although
's performance was good, the stock trend of Jinke Culture after the resumption of trading was far lower than expected and almost did not rise. On September 15th, Jinke Culture achieved its first daily limit after the resumption of trading. However, in the first four trading days of this week, Jinke Culture did not rise, and the stock price even fell slightly.
html At the close of trading on September 21, Jinke Culture closed at 13.28 yuan/share, a decrease of 2.86% from the closing price of 13.66 yuan/share on the day of the daily limit on September 15.
