Oct. 6, 2009 (PR Newswire) --
HARBIN, China, Oct. 6 /PRNewswire-Asia-FirstCall/ -- Harbin Electric, Inc. ("Harbin Electric" or the "Company", Nasdaq: HRBN), a leading developer and manufacturer of a wide array of electric motors in the People's Republic of China, today announced that Harbin Tech Full Electric Co. Ltd. ("Harbin Tech Full"), a wholly owned subsidiary of the Company, has entered into a definitive Agreement dated as of October 2, 2009 (the "Agreement") to acquire Xi'an Simo Motor Incorporation (Group) ("Simo Motor"), one of China's leading electric motor companies.
Pursuant to the terms of the Agreement, Harbin Tech Full has agreed to acquire 100% of the outstanding shares and all of the corresponding assets of Simo Motor in consideration for the payment of a purchase price equal to no less than six (6) times and no more than eight (8) times the 2008 audited net profits of Simo Motor. The closing of the acquisition is conditioned upon the completion of the registration of the share transfer with the requisite PRC authorities, which is expected to occur within the next 25 business days. The Company expects this acquisition to be earnings accretive immediately. The Company intends to utilize a portion of the proceeds from the public offering it completed in August 2009 to finance the payment of the purchase price.
With more than 50 years of history, Simo Motor is a leading developer and manufacturer of industrial rotary motors in China, providing electrical driving systems for a wide range of industrial applications. For the fiscal year ended December 31, 2008, Simo Motor's total unaudited revenues were approximately RMB 1,116.1 million (USD $160.9 million) and its unaudited net profits were approximately RMB 100.2 million (USD $14.4 million). Harbin Electric will publicly disclose Simo Motor's audited financial statements upon completion of the auditing process.
(The exchange rate used for currency conversion is RMB 0.14415/USD for the year ended December 31, 2008).
"We are extremely pleased with this acquisition," Harbin Electric's Chairman and Chief Executive Officer Tianfu Yang commented. "We believe that Simo Motor is a great company with demonstrated strengths in its area of expertise. As one of the market leaders and best-known brands in China's electric motor industry, we believe that the acquisition of Simo Motor will bring considerable value to Harbin Electric and its shareholders."
"Simo Motor produces an extended range of specialized and large-size industrial rotary motors such as high/low voltage motors and AC/DC motors, some of which only a very few companies in China have the capabilities to produce.
