Huaxing Capital M&A and Strategic Investment Biweekly Report Vol.53

As early as 2009, Huaxing Capital officially formed an M&A team to provide comprehensive and in-depth M&A advisory services to innovative economy enterprises in China and around the world. Under the current uncertain new normal of the market, strong demand for mergers and acquisitions continues to emerge. Huaxing Capital has always accompanied innovative economic enterprises, connected at home and abroad, and sought new opportunities.

The M&A and Strategic Investment Biweekly Report was published by Huaxing Capital's M&A team, focusing on key deals in the global market and sharing the latest industry observations.

Author | Huaxing Capital M&A Team

Vol.53 | 2022.4.06 — 2022.4.16

Musk plans to fully acquire Twitter for $43 billion

On April 14, according to documents submitted by Twitter to the US Securities and Exchange Commission on April 13, Musk proposed a takeover and planned to fully acquire Twitter at a price of 54.20 US dollars/share per share, for a total price of about 43 billion US dollars. Musk said the offer was its highest and final offer. If the offer is not accepted, he will reconsider his status as a shareholder of Twitter.

Bosch acquires British autonomous driving software manufacturer FiveOn April 12, according to open media reports, German auto parts and technology company Bosch announced that it would acquire Five, a British autonomous driving software manufacturer. Five was founded in 2016 and has a total of 140 employees at 6 locations in the UK to develop AI-based autonomous driving solutions through a combination of cloud software, safety and security, robotics, and machine learning.

Digital payment solution provider Voyager Innovations received a strategic investment of US$210 million, and Tencent participatedOn April 12, according to public media reports, Voyager Innovations, the owner of the Philippine payment and financial services app PayMaya (Maya Pay), completed US$210 million in financing, led by SIG Venture Capital, EDBI, First Pacific Company, PLDT, KKR, Tencent (Tencent), International Finance Corporation, and IFC Emerging Asia Fund, IFC Financial Institutions Growth Fund, etc. participated, and the post-financing valuation reached 1.4 billion US dollars. Voyager is a digital payment solutions provider focused on providing innovative digital solutions for future new business flows and evolving business models. The Philippines-based tech company is involved in the creation, development, and delivery of digital services, providing digital and financial services to millions of Filipinos through its e-wallets, digital payments, and remittance subsidiaries.

Epic receives $2 billion investment from Sony and LEGO parent companyOn April 12, according to public media reports, Epic Games received an investment of 1 billion US dollars each from Sony Group and the LEGO Group parent company “KIRKBI”, for a total of 2 billion US dollars. Epic said the funding will drive the company's vision of building a “metaverse” and support its continued growth. Following this funding, Epic's equity valuation reached $31.5 billion.

Hotel chain brand Migao Group receives strategic investment from Yicheng Liquor ManagementOn April 12, according to public media reports, Migao Group recently received a strategic investment from Yicheng Liquor Management. MGM Group is a chain of hotel brands, targeting the middle and high-end of the sinking market, focusing on Tier 3-5 cities. It owns two major brands, “MGM International Hotel” and “MGM Fashion Hotel”.

Xiaoyin Coffee Group wholly acquires VIP sparringOn April 11, according to public media reports, Xiaoyin Coffee Group recently completed the wholly-owned acquisition of VIP sparring and became its sole shareholder. Xiaoyin Coffee Group said that in the future, the group will use the replicability of standardized products, expand “by bit” to the country, deeply cultivate 49 Tier 1 and 2 core cities, cover 80% of the country's market, achieve large-scale commercial profits, and plan to achieve 10 billion dollars in revenue within 5 years. Xiaoyin Coffee Group was founded in 2015 and focuses on providing music and art counseling for children aged 4-16. VIP sparring belongs to Shanghai Miaoke Information Technology Co., Ltd., and launched the “Live One-on-One Online Musical Instrument Sparring” model in 2016, which focuses on solving the piano practice problems of 6-16 year old piano boys.Deal reviews:This acquisition means that the largest online music sparring platform in China and the most well-known offline music and art tutoring platform have merged into one to form the largest children's music and art group in China. It is expected that this acquisition will help both parties upgrade their strategies, effectively promote regulatory compliance with the current state of the “small”, “scattered” and “chaotic” industry, and gradually explore a new path that is more inclusive and suitable for children's music and art training.

Singularity Cloud and GrowingIO merger and restructuringOn April 11, according to public media reports, Singularity Cloud and GrowingIO jointly issued a statement announcing the merger, acquisition and restructuring of the two companies. The two sides will increase investment in technology and product R&D, enhance customer delivery and customer success capabilities, expand market investment, and further accelerate the transformation of customers to commercial data intelligence. It is reported that after mergers, acquisitions and restructuring, the two sides will maintain independent operations at the brand level.

Automotive connectivity company Yinji Technology received hundreds of millions of yuan in Series B financing, led by TencentOn April 11, according to public media reports, the automotive intelligent connectivity system supplier Yinji Technology announced the completion of Series B financing of hundreds of millions of yuan. This round of financing was jointly led by People's Insurance Capital and Tencent, followed by CMBC International, Bojiang Capital, and Chuyuan Venture Capital. Founded in 2008, Yinji Technology is an enterprise focusing on network information security. It specializes in automotive intelligent connectivity services based on security.
Nanowei Technology plans to acquire about 43.96% of the shares of Spectrum Instruments in cashOn April 11, according to public media reports, Nanowei Technology plans to acquire 43.96% of the shares of the participating company Sepure Instruments in cash, at a purchase price of 113 million yuan. Sepure Instruments is a large molecule separation and purification instrument and equipment developer. Its business integrates R&D, production, sales and service, and is committed to providing customers with instruments and equipment for the separation and purification of macromolecules such as proteins, antibodies, vaccines, peptides, and viruses.
Bolt plans to buy crypto payments company Wyre for $1.5 billionOn April 8, according to public media reports, e-commerce company Bolt will spend $1.5 billion to acquire fiat-cryptocurrency exchange and payment infrastructure company Wyre to enter the cryptocurrency and NFT sector. Wyre is a digital asset infrastructure developer located in San Francisco, USA. As an industry-leading payment infrastructure, it provides developers with simple, efficient, and powerful APIs, supports a range of financial, cryptocurrency, and authentication services. It is an important circulation channel between real assets and crypto assets, and Wyre ensures asset security with leading global risk control and compliance. Bolt and Wyre plan to work together to create new mainstream business solutions, including providing Bolt's global merchants, retailers, shoppers, and developers with tools to adopt cryptocurrencies. Bolt and Wyre are expected to be integrated by the end of this year, when Bolt's checkout system CheckoutOS will be incorporated into the cryptocurrency ecosystem.
Vimi sells 49% stake in China business for $45 millionOn April 7, according to public media reports, Vimi's deal to sell 49% of its shares in the Chinese business to underwear manufacturer Virginie for 45 million US dollars was completed, and the remaining 51% of the shares continued to be held by Vimi. Martin Waters, CEO of Vimi, said that cooperation with Virginie is a key step in the restructuring of the brand's international business, and in the future, it will continue to adjust the business in other markets around the world in the same way to help the brand better reach local consumers.

Fitness company Titivity Health to be acquired by Stone Point Capital for $2 billionOn April 7, according to public media reports, the fitness company Titivity Health has agreed to be privatized by investment company Stone Point Capital at a consideration of 2 billion US dollars. Titivity Health is a leading provider of fitness and health improvement solutions in the United States. It has SilverSneakers, a fitness program that provides exercise courses for people aged 65 and over, and WholeHealth Living, which provides health management for patients with chronic diseases.

Pfizer buys Reviral for $525 million to enhance its RSV antiviral portfolio

On April 7, according to open media reports, Pfizer announced that it would buy ReViral for $525 million. reViral is a clinical-stage British company focused on developing novel antiviral therapies against respiratory syncytial virus (RSV). The company's main candidate, sisunatovir, is an oral fusion inhibitor that blocks RSV replication by inhibiting the fusion of the virus and host cells mediated by the RSV-F protein. The drug was approved by the FDA Fast Track in August 2020.

Qualcomm acquires Arriver business from SSW Partners

On April 7, according to public media reports, Qualcomm announced that it had completed the acquisition of Arriver from SSW Partners. Arriver is a safe driving technology service provider that focuses on sensor perception and driving strategies, and can provide scalable advanced driver assistance systems (ADAS), collaboration, and autonomous driving (AD) solutions. The deal is expected to enhance Qualcomm's ability to provide competitive, open, fully integrated Advanced Driver Assistance Systems (ADAS) solutions to automakers and tier-1 suppliers.

Lianhe Medical plans to acquire a controlling interest in TCM chain Yuanda TCM

On April 6, Lianhe Medical (00928.HK) announced a memorandum of understanding with Liu Zhiwei, the actual controller of Yuanda Traditional Chinese Medicine Chain (Shenzhen) Co., Ltd. Yuanta TCM is undergoing a restructuring with Earn Wealth Group Holdings Limited, another company controlled by Liu Zhiwei. After the restructuring is completed, Earn Wealth Group Holdings Limited will hold no less than 51% of Yuanta TCM's shares. According to the memorandum of understanding, Liu Zhiwei will sell all of his shares in Earn Wealth Group Holdings Limited to Lianhe Healthcare after the restructuring is completed. Yuanda Traditional Chinese Medicine is mainly engaged in traditional Chinese medicine diagnosis and treatment, physical therapy, family doctors, health and wellness, and sales of traditional Chinese medicine. It is a well-known traditional Chinese medicine chain enterprise with strong regional influence.

AMD announces $1.9 billion acquisition of cloud computing startup Pensando

On April 6, according to public media reports, AMD will spend 1.9 billion US dollars to acquire cloud computing startup Pensando to enhance data center product capabilities and meet growing market demand in the cloud computing and enterprise sector. The fully programmable processor and software platform developed by Pensando can help enterprise customers and data center customers optimize cloud computing services for major companies such as Amazon Web Services.

Dafa acquires former subsidiary Yuan Rui for NT$910 million

On April 6, according to public media reports, Dafa Technology, a subsidiary of MediaTek, will acquire Yuanrui, which is also a TWS chip supplier, for 33 yuan per share. The purchase amount is NT$910 million, equivalent to about RMB 202 million. Dafa Technology is expected to obtain 91.05% of Yuanrui's shares. Former subsidiary Hara Rui is a professional designer and supplier of Bluetooth wireless audio chips. The main product line is TWS headphone chips.

Musk buys 9.2% of Twitter's shares and will join the board

On April 5, according to US Securities and Exchange Commission (SEC) disclosure documents, Tesla CEO Elon Musk already holds up to 9.2% of Twitter's shares. Musk is currently Twitter's largest shareholder and will join Twitter's board of directors.

Microsoft acquires Minit to help digital transformation

On April 4, according to public media reports, Microsoft has completed the acquisition of Minit. According to reports, Minit is a leader in process mining technology and can help companies “discover opportunities for continuous process improvement and operational efficiency.” Minit CEO said that as a member of the Microsoft family, they believe this will enhance the value Microsoft can provide to its customers in the field of digital transformation. The acquisition will further empower Microsoft to help customers digitally transform and drive operations by creating a complete picture of its business processes, making every process easy and automated to analyze and improve.

WeChat Caring Mode launches “Listen to Text Messages” function

On April 7, according to public media reports, the “Listen to Text Messages” function was launched in the WeChat Care Mode. After users turn on the text listening function in care mode, they can listen to the voice reading by clicking on the text message in the chat. This feature is now available on Android and iOS systems, and you can experience it by updating WeChat to the latest version.

WeChat Pay: Digital yuan support has been fully opened in all pilot regionsOn April 7, according to public media reports, recently, all of Beijing and Zhangjiakou, Tianjin, Chongqing, Guangzhou, Fuzhou, and Xiamen, as well as Hangzhou, Ningbo, Wenzhou, Jinhua, Shaoxing, and Huzhou, where the 19th Asian Games are located, were listed as new digital yuan pilot regions. Currently, WeChat Pay has fully opened support for digital yuan in all pilot regions. Users can use the Digital RMB App or WeChat to pay after opening a WeBank (WeChat Pay) digital yuan wallet with their real name.

51Talk co-founder and COO Zhang Liming resigned due to personal reasonsOn April 11, 51Talk announced that Zhang Liming, the company's co-founder and chief operating officer (COO), proposed his resignation due to personal reasons. He will officially step down as COO on May 15, 2022. Zhang Liming joined 51Talk as a co-founder in 2014 as Chief Operating Officer. He previously worked for Wall Street English as Deputy General Manager.

NIO's autonomous driving veteran Zhang Jianyong will leave his job, and the team of nearly 400 people is facing integrationOn April 7, according to public media reports, Zhang Jianyong, a veteran of NIO autonomous driving, will leave his job soon after spending 7 years with NIO. Zhang Jianyong is NIO's Assistant Vice President of Autonomous Driving. He is responsible for the implementation of autonomous driving systems and integration, and reports directly to NIO Chairman and CEO Li Bin. The autonomous driving system team under Zhang Jianyong has a size of nearly 400 people. After its departure, it will also trigger the reintegration of NIO's entire autonomous driving team.

Liu Qiangdong stepped down as CEO of JD Group and Xu Lei took overOn April 7, JD Group announced that Liu Qiangdong will no longer serve as CEO of JD Group, and Xu Lei, president of JD Group, will be promoted. Liu Qiangdong will continue to serve as the chairman of JD's board of directors. According to the announcement, Xu Lei will later be responsible for all daily operations of the JD Group and will continue to report to Liu Qiangdong, while Liu Qiangdong will invest more energy in long-term strategic design, major strategic decisions and deployment, training young leading talents, and rural revitalization. According to close senior sources, after stepping down as CEO of JD Group, Liu Qiangdong will still participate in JD's monthly SEC (Strategy Executive Committee) meetings, management analysis meetings, etc., and will not completely stay away from the company's business.

Source: Company announcements, public market information, etc.

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