China

Yunnan Chuangxin New Material to Acquire Shanghai Enjie for RMB 5.5 Bln

Summary:

  • Yunnan Chuangxin New Material Co Ltd (002812.SZ) recently announced plans to acquire 100% of Shanghai Enjie Co. for RMB 5.55 billion, as Cnstock reports.
  • Yunnan Chuangxin New Material plans to issue 107.6 million shares at RMB 51.56 to finance the deal.
  • Yunnan Chuangxin New Material also plans to raise up to RMB 800 million to support the acquisition financially and to develop Shanghai Enjie’s production line in Zhuhai City.

Why It Matters:

  • Yunnan Chuangxin New Material is mainly engaged in the manufacture of packaging print products while Shanghai Enjie is a lithium battery isolation membrane manufacturer. Yunnan Chuangxin New Material wishes to enter the lithium battery isolation membrane business through this acquisition.
  • Shanghai Enjie posted net profits of RMB 199 million and RMB 29.72 million respectively for 2016 and 2015. While the company has been growing quickly over the past a few years, Shanghai Enjie has been fined several times by Chinese regulators for violation of a number of rules, including fire-control rules and environment protection rules.
  • By the end of 2016, Yunnan Chuangxin New Material’s total assets had reached RMB 1.89 billion. The value of this acquisition equates to 293.66% of the company’ total assets and the transaction has attracted wide attention from the market.