(By Balaseshan) Zoom Technologies Inc. (NASDAQ: ZOOM) said it has agreed to sell its China-based manufacturing, sales and marketing, and R&D subsidiaries, and that the proceeds of the sale will be used for the purchase of additional U.S.-based businesses.
As consideration for the sale, Beijing Zhumu Culture Communication Co. Ltd. shall pay the company an aggregate of 200 million renminbi, equivalent to about $32 million.
The sale includes: 100% ownership of Beijing Nollec Wireless Co. -- the R&D subsidiary, 80% ownership of Tianjin Tongguang Group Digital Communication Co. Ltd. (TCBD) -- the main manufacturing entity, 100% ownership of Profit Harvest Corp. Ltd. -- the sales & marketing company, and 100% ownership of Celestial Digital Entertainment Ltd. (CDE) -- the mobile game maker.
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The company's ownership interest in SpreadZoom Technologies Co. Ltd., which owns and operates mobile phone manufacturing facilities in Tianjin and which is a joint-venture between the company and Spreadtrum Technologies Inc., is not part of the sale.
The final closing of the sale of the above-mentioned subsidiaries of the company is anticipated to take place within the first quarter of 2013 with the exception of Profit Harvest which closing occurred as of December 31, 2012.
In addition, the company will, through Portables Unlimited, LLC, its U.S. based subsidiary, continue to operate the exclusive wholesale distributor business for T-Mobile products and services in the United States.
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The company plans to use the cash proceeds from the sale of the assets to acquire similar businesses in the U.S. to further expand its activities there, including but not limited to the acquisition of additional licensed retail stores that service T-Mobile USA.
ZOOM is trading 25.99% higher at $0.668 on Monday. The stock has been trading between $0.47 and $1.94 for the past 52 weeks.