capital injection after nine positive decade, CDH 2017 to join the largest shareholder of Shanghai Nine Yang Lihong again, it invested $ 1.6 billion cross-border acquisition of 70% stake in the US small appliance business SharkNinja. Both then cooperation to build offshore platforms JS Global life, through a series of complex restructuring adjustments, the final listing in Hong Kong. CDH and nine-yang, in the transformation and upgrading of their goal and win-win cooperation, to become a leading international private equity boost industrial development of another typical case.
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Unlike other listed companies listed on the label border Ms approach, nine positive by epitaxially M & a, after international channels and diversify category, and then through the core business in Hong Kong "secondary listing" to create a new financing platform, reducing the debt burden, and through mergers and acquisitions attack smart home service provider planted foreshadowing.
As compared to the previous financial investors to participate in the nine-yang Pro-IPO financing, after ten years CDH full participation in cross-border acquisitions and JS nine positive global life on the market, full life-cycle investments. In PE have purely financial investors from the wave of restructuring in the industry, investors, CDH together industry leading overseas mergers and acquisitions industry benchmark model, not only help enterprises gain new growth momentum, while the accumulated investment industry experience and resources for their own.
In shuffle PE twenty-eight differentiation, it is possible for the company "forming", and then solve its head pain point mechanism, will form a virtuous circle, can not follow-up mechanism will gradually be eliminated.
As used herein will be divided into the following sections:
01. Nine Yang: grow flat, flat stock, internal and external pressure surge
02. CDH: Pro-IPO investment income over nine positive 98.3%, after a decade together again have a clue
03. Acquisitions: US $ 1.608 billion SharkNinja Group join forces to get 70% stake in
04. Restructuring: the formation of the main Hong Kong stock market, the completion of the equity adjustment footwear, eventually won SharkNinja100% stake in
05. Listed: lower pricing completed IPO, raising debt to ease pressure
06. Test: three brands can co-create new profit growth point?
Chinas small household appliance market competition ecology severe
not the same appliance business, rely on the OEMs asset-light model, focused on research and development upstream and downstream distribution
SharkNinja revenue than nine-yang, Shark, Ninja brand gross margin is higher than the nine positive brand
take full advantage of the financing platform, stepping robotics field
December 18, 2019, JS Global life (01691.HK) announced after nearly two months to postpone IPO plans, finally listed on the HKEx.
JS Global Life A-share listed companies 9 Yang shares (002,242) indirect controlling shareholders, the listing can be understood as 9 Yang shares in Hong Kong stocks of "secondary listing", except that its newly acquired US small appliance company SharkNinja provides a synergistic development space for about nine positive international.
in September 2017, JS Global completed the acquisition of life SharkNinja, which owns Shark and Ninja brand, the flagship Shark vacuum cleaners, sweeping machines and other electrical products, household cleaning, Ninja flagship multifunction pressure cookers, coffee machines and other small kitchen Home appliance. This time the acquisition not only expands the nine positive product category, while providing a mature channels and space for nine positive brand to enter the international market, SharkNinja brands to enter the Chinese market. However, the other side of the joint development of the story is that after the completion of the acquisition, asset liability ratio JS Global Life in 2016 surged 32.8% to 86.7%, carry a heavy debt burden, which is the reason it has to promote the market.
It is worth mentioning that has been involved in nine positive Pro-IPO financing shares of CDH Investments, the controlling shareholder and time again 9 Yang shares of Shanghai Che-hung Enterprise Management Co., Ltd. ( "Shanghai Che-hung." ) work together, help it to complete cross-border acquisitions SharkNinja, and then complete the IPO in Hong Kong and become the second largest shareholder of JS Global life. Between the
years, nine Yang, one of the leading small home appliances standing international, diversified transformation and upgrading of the mark, also head of PE CDH industry reshuffle of the cold transformation and upgrading, both this Fan "PE + entity leading" cooperation and jointly promote the growth of each other in the industry change.
JS ringBall life on the market, CDH Investments, a wholly owned subsidiary of Easy Home Limited and Total Comfort Home Limited directly holds 10.85% of the shares, calculated in accordance with the first-day closing price of HK $ 5.49 / share, the market value of shares of HK $ 1.985 billion. As stock prices continue to rise, CDH holding the market value will increase. While the harvest of book profits, CDH longer a simple financial investor role, but business entities in the process of growing strategic partnership.
01 Nine Yang: grow flat, flat stock, internal and external pressure surge
Shanghai Che-hung hand in CDH cross-border acquisitions SharkNinja, from July 27, 2017 launch, 2017 September 29 is completed, the whole process took two months, fast and efficient, all in one. This 9 Yang shares for the acquisition of urgent, or not unrelated.
From the performance perspective, 9 Yang shares 2008-- compound annual growth rate of revenues in 2017 only 5.3%, while fellow Supor was 12.68%. 9 Yang shares net profit increased by only 14.53 percent in a decade, Supor the corresponding increase 458.19% (Figure 1).
On the other hand, small household electrical appliance enterprises generally differentiated two different development paths, one is by virtue of the supply chain, financial, technical strength, while trump card products occupied the absolute advantage of the expanding category, brand new products enabling to realize routes covering the whole category of small household appliances, such as Midea Group, its different categories of small household electrical appliances market sales in 2018 were the top four; the other is with a single product category explosion, in the fierce competition to establish brand awareness, followed by ongoing product iteration, so as to maintain market competitiveness of the route, such as listed Difficult puppy appliances. The earnings growth of 9 Yang shares the lack of "bright spots", Soymilk market share, although ranked first, but the future incremental market is limited, and intensified brand competition, the future of the business trend was fall behind.
At the same time, after nine Yang shares listed on the lack of dazzling capital operation, in 2016 conducted a private placement of shares, the acquisition of a stake in the companys nine-yang, the companys share price performance is relatively flat. When listed on May 28, 2009, 9 Yang shares the market value of 6 billion yuan, the same period Supor (August 17, 2004 listed) market capitalization of about 72 billion yuan, both at almost the sameA "starting line." In January 2020, Supor market capitalization increased to more than 600 billion yuan, 20 billion yuan less than the market value of the nine-yang, Supor only 1/3 of them is quite different. Nine Yang urgent need to open up new growth point.
in the annual report as early as 2016, the 9 Yang shares have been clearly stated, "to promote the extension will explore the development, seeking opportunities for cooperation in the field of small appliances on a global scale."
have to say, low-end, when the "wisdom made the era of" homogenization "Made in Time" to technology and the internationalization of the transition, epitaxial, diversification, international expansion has a small domestic the common choice of home appliance brand. Small appliances have the natural characteristics of the product guide consumption, companies become bigger and stronger, one needs an iterative and continuous product innovation category expansion, product manufacturing explosion in the trend of consumption upgrade, enhance brand awareness and profitability, on the other hand in the saturated state of competition in the domestic market, the need to expand the international market, open up new sales growth. This became one of the engines of small household electrical appliance enterprises epitaxial mergers and acquisitions.
Against this background, the acquisition of Toshibas white business, with a strong influence of the Toshiba brand, reversing foundry role that small appliances and other business, and gradually the output of the United States and Southeast Asia and other international markets brand of beauty; the controlling shareholder of Supor France SEB Group is a world-renowned cookware manufacturers and small appliance manufacturers, have history of 150 years, which not only provide technical support for Supor, more Supor products provide exported to Japan, Europe, America, Southeast Asia, more than 50 countries and regions worldwide channels. 2018, Supor foreign trade main business income of 4.742 billion yuan, accounting for nearly 30% of revenue, and an increase of 9.73% compared with 2017, reflecting the strong growth Supor international business.
through internationalization, regardless of the product category of the rich, brought a large number of brand OEM sales rose, and overseas channels to expand the brand, provide a new profit growth point for these companies. This is Soymilk started to electrical products dominated the 9 Yang shares Inconvenient external competitive pressures.
At the same time, 2014-2018, Chinas small household appliance market size increased from $ 16.2 billion to $ 23.7 billion, the annual compound growth rate of 10 percent, forecast retail market in 2023 will reach 40.9 billion US dollars, small household electrical appliance enterprises expand the scale and enhance the technological strength and brand competitiveness in order to share the lineIndustry development outcomes is inevitable logic.
It is worth mentioning that, Yang shares listed on the back nine, in fact, the accused Wang Xuning net worth of 2.62 billion yuan in 2009 aboard New Fortune 500 richest people, ranking 202 in 2010 to 3.21 billion yuan net worth It ranked 294 in 2011, but quickly fell off the list, and then not on the list. Nine positive reputation, did not bring considerable wealth growth Wang Xuning and other shareholders. Shareholders also have nine positive "tell new stories," the power.
under internal and external pressure, 9 Yang shares to start planning for acquisitions. Coincidentally, which a decade ago CDH partner on hand, just to have a proper subject.
02 CDH: Pro-IPO investment income over nine positive 98.3%, after a decade together again have a clue
2016, 9 Yang shares the controlling shareholder of Shanghai Lihong had intended to initiate the acquisition of Germany a high-end kitchenware brands, this time CDH also studying German company, the two sides reach an agreement soon, the joint research project. Ultimately, the target was acquired by a French small household electrical appliance enterprises. Until 2017, from the United States SharkNinja small household appliances enterprises seeking to sell shares, and find CDH. CDH After studied the underlying assets, the Shanghai Che-hung matchmaking, the two sides hit it off, this acquisition germination.
SharkNinja Groups Shark vacuum cleaner is the largest US brand, Ninja is the second largest food machine brands, broken machines and vacuum cleaners is precisely the China small household appliance market growth marked two categories. This may be the root cause of nine positive and determined to acquire SharkNinja of fancy.
With the rise of the consumer to upgrade the Z generation, sales of small household electrical appliances have differentiation occurs. National Household Appliances Industry Information Center data show that in 2018 the growth rate of small household electrical appliances significant part of the product, which, cleaner retail sales to achieve 46% growth compared with 2017, the cleaning robot products retail sales growth also exceeded 47%, and the pusher cleaning products also remains positive. Behind it is that rising labor costs brought about by nannies, cleaners and other income rose tremendous demand for the liberation of electrical household chores.
At the same time, living under high pressure, peoples health concept of health increasing, after adding 90 insulation foam cup medlar army in 2018 broken machine market growth rate of over 50%, zeroSales value of over ten billion yuan, the market size of more than ten million units.
In addition to providing desirable acquisition targets, nine positive chose to partner with CDH, what reason?
as head of PE CDH, not only has a strong fund-raising capabilities and financial strength, but also has extensive experience in cross-border M & A Trader industry leading industry giants.
In 2013, CDH Shuanghui Power for $ 7.1 billion cost of cross-border acquisitions of US meat processing giant Smith? Rumsfeld, then set Wanzhou International, Will Smith? Rumsfeld and Shuanghui two brands included in Wanzhou International and Hong Kong stock market, CDH become the second largest shareholder international Wanzhou, Wanzhou International has become one of the worlds largest and most competitive brand meat processing enterprises.
in May 2018, CDH help CHINAGRANDPHARM to acquire rival US company Varian compared with a premium of 20% of the price, that is 1.9 billion Australian dollars (about 9.5 billion yuan) of the cost of cross-border acquisitions ASX the liver cancer treatment company Sirtex. After completion of the transaction, CDH and CHINAGRANDPHARM jointly controlled Sirtex, and accelerate their products into the Chinese market, which is a market evaluation of both commercial value and social significance of the transaction.
past M & A experience and a good record, when nine positive selection is an important cause of CDH. So, how can choose to join CDH nine positive?
In fact, both deep ties. CDH has invested nine positive a decade ago, and in 2008 assisted 9 Yang shares listed on the A shares.
June 12, 2007, CDH capital increase to 9 Yang shares the predecessor of Shandong Nine Yang 84.51 million yuan, which included the registered capital of 714,800 yuan, the remaining funds included in capital surplus, capital increase is completed, Ding Hui holds a 5.03% stake in Shandong nine Yang. At the same time, CDH price of 30.72 million yuan transferee Bilting holds 1.8285% stake in Shandong Nine Yang. Through two transactions, CDH price of $ 115 million to get to 6.8571 percent stake in Shandong Nine Yang.
In September 2007, Shandong nine positive overall change to joint-stock companies. 2008 May 28, 9 Yang shares listed on the Shenzhen Stock Exchange, CDH stake diluted to 5.1364 percent, ranked the third largest shareholder. Calculated in accordance with the public offering price of 22.54 yuan / share, CDH 9 Yang shares held by equity market capitalization of 309 million yuan, investment in one year, The book floating surplus 168.7%.
After 2008, twice in 2009 reserve capitalization, to 2011, CDH shareholding has increased to 3908.55 million shares, 5.14% stake. May 29, 2011, 9 Yang shares listed shares for three years lock-up expiration of the lock. August 18, 2011, CDH holdings of 130 million shares, cash of about 13,959,400 yuan. After the reduction, CDH 9 Yang shares held by equity ratio fell to 4.97%, holds less than 5%, after the reduction behavior is no longer required public disclosure. 2013 year, CDH has been listed the top ten shareholders not before 9 Yang shares.
private equity investment cycle is limited to fund-raising, CDH Investments 9 Yang shares exit in six years. According to the 2013 annual average of 238 trading days closing price of 7.17 yuan / share estimate, CDH reduction of 3.39% stake in nine Yang shares received at least 185 million yuan. Plus 2008-- book income in 2009, CDH were given bonus 10.9714 million yuan (before tax), 18.2399 million yuan (before tax), CDH exit 9 Yang shares of at least 228 million yuan, investment income over 98.3%. It is worth mentioning that the CDH exit in 2013, at just nine positive share price downturn, which directly affect the investment income of CDH.
9 Yang shares listed so far share price (recovery of the right) charts
CDH posted 9 Yang shares directors focus Shuge, from 2007 September 12 served as directors of listed companies to date. With the foundation before, the two sides cooperate once again a matter of course.
From another perspective, this cooperation also contributes to grasp CDH PE resources in transition.
In recent years, PE industry winter, equity investment and tube links back four have become more difficult. On the one hand the economic slowdown, corporate profits shrink, raising more difficult; on the other hand, a number of industry consolidation in the clearing below the stock game, burn expansion and other business models fail, investment more difficult, Pro-IPO arbitrage model end. At the same time, deleveraging and strict supervision of enterprises to bring mine explosion again and again, has been put into project management more difficult; along with financial reform and opening up, the pilot registration system, A-share market investment philosophy converge international, twelve market spreads narrowed, exit gains to close narrow.
followed by, PE industry volumeShuffle into the tide than 28 increased differentiation. In addition to funding, can the traditional enterprise, "enabling", and then head to solve the pain points of enterprise development agency, will be formed from fund-raising, investment and withdraw from the virtuous cycle, and can not follow up mechanism will gradually be eliminated. For this reason, PE investors have the pure financial investor transformation industry, implementation of the "financial industry +" strategy.
to see from the experience of the US market, according to research firm CAPITALIQ statistics, 1986-1989, KKRs IPO exits accounted for up to 88%, only 12% of mergers and acquisitions exit; but by 2012, its acquisition exit proportion has soared to 87%, IPO exit shrank to 9%, PE resale remaining proportion of 4%. Now, with the changes in Chinas economic structure, the PE business also began to shift and trend forward earlier in the country. Depth combined with industry, will become PE physical options, thus enabling enterprises and PE each other.
such as CDH, head of mergers and acquisitions in the past together industry leading overseas PE industry benchmark, often become the preferred industry leading cross-border mergers and acquisitions; and more cooperation, will make deployment of resources in the industry, integration of resources thus matching supply and demand side interoperability cooperation will become more powerful, then get more say in the area of 鈥嬧€媔nternational division of labor. In other words, with the domestic industry leader, not only can help businesses gain new momentum of growth and development space, but also for its own accumulation PE investment industry experience and industry resources.
is not only the acquisition of such transactions, the year 2019, the most talked about Gree mix change, to participate in the acquisition of state-owned Zhuhai Gree Group holds a 15% stake, is led Hillhouse Capital buyout fund, displayed in the PE head more and more capital to play a pivotal role.
It can be said, as financial investors to participate in the nine-yang Pro-IPO financing compared to ten years ago, ten years later, CDH full participation in the acquisition of Shanghai Che-hung outside the underlying assets and a stock market listing JS Global life, become nine positive international development of the most effective strategic partner, has a deeper meaning.
03 acquisitions: US $ 1.608 billion SharkNinja Group join forces to get 70% stake in
to shareholders of nine positive, the new stories tell how, is crucial.
Chinese enterprises Tunxiang cross-border M & A, the usual operating practices, one is cross-border andAfter the target company after its purchase into the listed company, in order to boost the performance of listed companies and stock prices, such as auto parts maker Jifeng shares (603 997) to acquire a controlling stake in the auto parts Grammer leading into the listed company after its privatization, Metairie Connaught (300,038) the largest shareholder of cross-border acquisitions BBHI Group shares, major shareholders of listed companies to issue shares to acquire again the underlying assets into listed companies; one is the listed companies to set up overseas subsidiaries direct acquisition target company shares, after the completion of the transaction and realize table, such as Midea Group (000333) acquired the German company KUKA robot manufacturer, Nasdaq (002,180) acquisition Lexmark international.
For the 9 Yang shares, the total share capital of 767 million shares, worth about $ 20 billion, if the acquisition of the issued shares of ten billion yuan valuation SharkNinja equity, would constitute a major asset restructuring, the Commission must report equivalent standard IPO carried out in the project approval, the longer the waiting period, and involve complex tax and legal issues. More importantly, planning international development of nine positive need an international financing platform to build a new platform, more conducive to "tell new stories."
from the nine positive shareholders for the acquisition of joint CDH SharkNinja built architecture point of view, the two sides may start as overseas listed ready.
Shanghai joint force Hong CDH acquisition SharkNinja, is divided into two steps, namely the acquisition of the main building outside, outside the main shareholders to acquire a 70% interest SharkNinja.
The first step, Shanghai Che-hung were in the British Virgin Islands (BVI), the Cayman Islands, set up offshore acquisition framework.
May 4, 2016, Shanghai Che-hung incorporated a wholly owned subsidiary of Zheng Hong Developments Company Limited (referred to as "Zheng Hong") in Hong Kong; July 4, 2017, Zheng Hong in the British Virgin Islands with limited liability Chen Hong Developments Company Limited (referred to as "Chen Hong"), Chen Hong Xiang Hong Developments Company Limite with registered subsidiaries in Virgin IslandsD (referred to as "Xiang Hong").
At the same time, Global Appliance 1 Limited (referred to as "GA1") registered as an exempted company in the Cayman Islands (exempt from any income tax items), Shanghai Che-hung indirect wholly-owned subsidiary of Xiang 70% Hong holders of GA1 equity, a wholly owned subsidiary of CDH Easy Home Limited (abbreviated "Easy Home") holds a 30% stake of GA1. GA1 immediately exempted company incorporated in the Cayman Islands Global Appliance 2 Limited (referred to as "GA2").
This is a typical "BVI + Cayman companies combined overseas acquisition structure, lay the foundation for the future to promote the acquisition of assets on the market. For purposes of tax avoidance, BVI company for building special purpose company, the Cayman company to facilitate the establishment of overseas listing of the main.
The second step, subject to foreign acquisition consideration of US $ 1.608 billion acquisition of 70% stake in the controlling shareholder SharkNinja.
July 27, 2017, through the relevant stock purchase, stock and dispatch operations such as scrolling equity injection, GA2 SharkNinja get 70% stake in the controlling shareholder of Compass, Compass Aggregator (referred to as "CA") holds the remaining SharkNinja 30% stake (FIG. 2). Acquisition
acquisition of the main Compass paid to SharkNinja controlling shareholder of New Euro-Pro Holdings LLC for the price of $ 1.608 billion, of which cash payment of $ 1.317 billion, with 30% equity and Share Option Compass paid 2.91 One hundred million U.S. dollars.
completed the acquisition of the most critical part is the acquisition of the main layers of the architecture, where the final acquisition of funds from?
in the acquisition arrangement, Compass indirect wholly-owned subsidiary of GA as a direct buyer, the acquisition of New Euro-Pro held 70% stake in Euro-Pros. Euro-Pro dispatched by the remaining 30% stake to the upper New Euro-Pro original shareholders, which is the original shareholders30% stake in a 30% equity interest in injecting CA, CA and then injected into the rights and interests of Compass, Compass exchange for 30% stake, the original shareholders of New Euro-Pro will indirectly hold a Euro-Pro, the substitution of 30% became Compass equity.
In fact, of $ 1.608 billion deal on the price, the $ 291 million equity financing, namely equity level maneuvers. GA actual use of funds of $ 1.3166 billion in cash, financed by cash GA1 equity of $ 580.1 million, GA1 debt financing of $ 742.4 million, paid in cash on completion of the price, the remaining $ 5.9 million deposited in the account GA.
and GA1 equity investment from Shanghai Che-hung and CDH equity capital injection, which CDH invested $ 1.7403 billion in Shanghai Che-hung invested $ 4.0607 billion. At the same time, both leveraging of $ 742.4 million debt financing to achieve the goals of the acquisition of 70% stake in SharkNinja Group. July 29, 2017, completed the acquisition of funds to pay, SharkNinja equity settlement is completed.
After the joint acquisition of 70% stake in SharkNinja Group, SharkNinja Compass Group became a wholly owned subsidiary of CDH, Shanghai Che-hung respectively hold 21% and 49% of the shares SharkNinja Group.
So, the acquisition of specific funds come from?
JS Global Life prospectus shows that in September 2017, for the acquisition of SharkNinja, Compass bank loan of US $ 1.2564 billion. Of which $ 470 million bridge loan (interest rate of 3-month London Interbank Offered Rate, ie LIBOR + 1.55%), A grant of $ 225 million term loan (interest rate of LIBOR + 3.25%), approved $ 455 million term loan B (interest rate of LIBOR + 2.75%) and no more than $ 225 million (interest rate of LIBOR + 4%) of the revolving loan.
It is noteworthy that, according to plan, the acquisition SharkNinja equity bridge loan of 470 million yuan, Zheng Hong loans from the Industrial and Commercial Bank, but ultimately by HeZhou Partnership to ICBC (Asia)Loans to 470 million US dollars, and is held by the 9 Yang shares 276,300,000 shares as collateral for secured loans.
to obtain funds HeZhou Partnership with consideration of US $ 470 million, subscribe JS Global lives of about 160 million shares of common stock, holders of its 81.32% stake; JS Global Life followed by Chen Hong acquisition of Xiang Hong 100% stake , Chen Hong Zheng Hong assigned to its shareholders on the sale price charged by Xiang Hong100% stake, Zheng Hong acquisition of the loan is fully repaid SharkNinja equity matters. Perhaps due to financial pressure, Compass did not acquire SharkNinja100% stake in one fell swoop, but rather to promote its listed only acquire the remaining 30% stake in the last two years.
04 reorganization: the formation of the main Hong Kong stock market, the completion of the equity adjustment footwear, eventually won SharkNinja100% stake in
After the CDH to join Shanghai Che-hung Group acquired a 70% interest SharkNinja, start planning for the acquisition of the subject of merger and IPO business matters territory. SJ overseas listing of the main global life after the establishment of the Cayman Islands, for tax optimization purposes and to facilitate the financing of the gather, a series of equity and equity restructuring adjustment sequence start. Finally, CDH and Shanghai Che-hung will be replaced with a stake held by Compass Global Equity JS life, become an indirect wholly-owned subsidiary of Compass JS Global life.
brief summary, all of the equity restructuring mainly divided into three parts: First, set up listing of the main JS Global life,
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