SHENZHEN, China, Sept. 06, 2017 (GLOBE NEWSWIRE) -- Shenzhen Kaizhong Precision Technology Co. Ltd.
(“Kaizhong” 002823.SZ) is pleased to announce that it has made a binding superior proposal (the “Superior
Proposal”) to acquire all of the issued and outstanding shares of Pacific Insight Electronics Corp. (TSX:PIH)
(“Pacific Insight”) for cash consideration of $24.35. The Superior Proposal ascribes a value to Pacific
Insight of $189.5 million on a fully diluted basis, which represents a 31.6% premium to the price offered by Methode Electronics,
Inc. (“Methode”) pursuant to the transaction contemplated by the arrangement agreement (the “Methode
Agreement”) dated August 1, 2017 (the “Methode Transaction”), and a 131.9% premium to Pacific Insight’s
share price on the Toronto Stock Exchange on July 31, 2017, the trading day immediately prior to the announcement of the Methode
Transaction.
Kaizhong’s Chairman, Mr. Haoyu Zhang, stated “We are pleased to make a binding offer to acquire Pacific Insight
at a valuation that we believe provides full value for shareholders. We believe our proposal is more compelling for
shareholders than the Methode Transaction, and are committed to working diligently to completing our proposed transaction as
expeditiously as possible”.
The Superior Proposal will be funded by Kaizhong using its available cash on hand and the proceeds of a loan
facility which has been committed by GF Securities Co., Ltd. (“GF Securities”), a leading investment bank in
China.
Kaizhong proposes to complete the transaction represented by the Superior Proposal on substantially the same
terms as are set out in the Methode Agreement. In particular, the Superior Proposal will be subject to similar conditions
precedent for closing with respect to applicable regulatory approvals, which in the case of the Superior Proposal will require:
(a) shareholder approval of Kaizhong to be obtained at a special meeting of shareholders to be
convened as soon as practicable following the execution of a definitive agreement, pursuant to which Kaizhong has already obtained
the written approval of shareholders holding more than two-thirds of the issued and outstanding shares of Kaizhong; which means
there is no uncertainty with respect to shareholder approval for the proposed transaction.
(b) completion of filings with the municipal branches of the National Development and Reform
Commission and the Ministry of Commerce of the People's Republic of China with respect to the Proposed Transaction.
Kaizhong estimates that it will be able to satisfy the foregoing conditions precedent and complete the
transaction represented by the Superior Proposal by December 31, 2017.
About Shenzhen Kaizhong Precision Technology Co. Ltd.
Headquartered in Shenzhen, Kaizhong is the largest commutator supplier in China and the second largest
globally. It is a leader in R&D, manufacturing, and sale of a wide portfolio of commutators, slip rings, and
connectors. Its products are used in the automotive, aerospace, medical, and household electronic sectors. It is a
strategic supplier to world renowned OEMs and Tier 1 suppliers including BOSCH, Daimler, Continental, and ASMO. Its global
distribution network covers countries such as Germany, Switzerland, France, Mexico, the U.S., Japan, India, and China.
In May 2016, Kaizhong acquired a related business of Sideo Vogt, which is a Tier 1 supplier of Daimler in
precise high elastic spare parts. The acquired business has been Daimler’s supplier for 100+ years. Post-transaction,
we injected fresh capital and brought in new long-term customers to the acquired business. Local management retained its
autonomy and operational independence.
Kaizhong’s 2016 revenue was US$167mn and EBITDA US$29mn. It is listed on the Shenzhen Stock Exchange with
market capitalization of US$817 million (as of September 5, 2017). Kaizhong is not a state owned enterprise nor is it
affiliated with any state owned enterprises in the People’s Republic of China.
On behalf of the Board of Directors of Shenzhen Kaizhong
Precision Technology Co. Ltd.
SHENZHEN KAIZHONG PRECISION TECHNOLOGY CO. LTD.
Furong Ind. Zone, Xinqiao, Shajing, Baoan, Shenzhen, Guangdong, China, 518125
For more information please contact our financial advisor: Michael Sun, Director GF Securities Email: michaelsun@gfgroup.com.hk Telephone: +852 3719 1139
