Kandi expands battery cell business with acquisition of Jiangxi Huiyi.
Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), announced the expansion of its battery cell business with the acquisition of a leading cell producer in Jiangxi Province, China.
Kandi is a leader in electric vehicles and associated parts, including the cell business of subsidiary Ankao and the intelligent battery exchange system, so this acquisition is a natural fit to its vertical integration strategy. The company to be acquired, Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi Huiyi”), produces approximately 90 million 18650 lithium-ion rechargeable cells annually.
The cells have a variety of applications, especially in consumer products. Kandi intends to further grow its cell business by using the newly acquired technology to address many new applications, eventually including EV battery packs.
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Mr. Hu Xiaoming, Chairman and CEO of Kandi commented:
With the rapid growth of new forms of electric propulsion mobility, the battery industry is literally in its infancy.
“Whether it is classic pure-EV automobiles, recreational products like hoverboards, or the air transportation of the future, eVTOLS, the need for powerful, safe, and reliable battery storage will grow exponentially over the coming decades. Kandi already has significant expertise in electric propulsion, so this acquisition is the first step to take our expertise and market presence to the next level.
Jiangxi Huiyi is already a high volume, profitable producer. Under Kandi’s ownership, we intend to grow volume and market share by leveraging their technology to address many emerging applications.”
Mr. Liao Zongjiang, Chairman of Jiangxi Huiyi added:
We are honored to join the Kandi family.
“We are confident that Jiangxi Huiyi can achieve a net annual profit of no less than RMB 15 million (approximately $2.3 million) with no extra investment. With the resources of Kandi behind us and with incremental investment, we will endeavor to increase our targeted net profits to RMB 35 million (approximately $5.4 million) in 2023 and RMB 100 million ($15.4 million) by 2025.”
Deal Terms
On July 13, 2021 (“Signing Date”), Kandi’s wholly owned subsidiary Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”) signed a Share Transfer Agreement and a Supplementary Agreement with the shareholders of Jiangxi Huiyi to purchase all its equity shares.
Consummation of the transactions contemplated in the Share Transfer Agreement and Supplementary Agreement is expected to take place no later than thirty business days and no later than three years after the Signing Date respectively.
Pursuant to the terms of the Share Transfer Agreement, Zhejiang Kandi Technologies will acquire all the equity interests of Jiangxi Huiyi with a purchase price of RMB 50 million (approximately $7.7 million) in cash. Zhejiang Kandi Technologies is obligated to pay half of the price no later than five business days after the Signing Date, with the remaining half paid upon consummation of the transaction (the “Closing Date”).
Pursuant to the Supplementary Agreement, the Company may issue up to 858,770 shares of registered stock each year for the next three years to the shareholders of Jiangxi Huiyi, conditioned on the fulfillment of the condition that Jiangxi Huiyi achieve no less than RMB 15 million (approximately $2.3 million) net income over the course of each of the following three years.
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Kandi Expands Battery Cell Business with Acquisition of Jiangxi Huiyi, JINHUA, CHINA, July 19, 2021
