China Unistone announced the signing of an acquisition agreement to acquire 100% of Beijing Sihitech Co. Ltd and Beijing e-Channels Century Technology Co. Ltd.
Under the terms of the agreement, China Unistone will acquire the equity interests in Sihitech and e-Channels for an aggregate of US$4,000,000 and approximately 5,300,000 shares of China Unistone common stock equal to 55.8% of the total issued and outstanding common stock of the post-transaction company, of which 1,400,000 shares are contingent upon audited 2005 and 2006 financial performances of e-Channels and Sihitech, respectively and subject to return.
In addition, the owners of Sihitech and e-Channels have the right to receive additional cash consideration and adjustments to the number of shares based on receipt of additional investments of capital and company performance from 2007 until 2010.
Sihitech and e-Channels are private companies operating in China that provide IT solutions and services to the growing banking industry in China.
The companies currently focus on offering IT solutions and services to top tier banks, with plans to expand their core offerings beyond internet banking, call center and customer data platforms to other participants in the financial services industry in the future, including smaller regional banks, insurance companies, investment banks and securities firms.
Sihitech, founded in 1999 by Hong Weidong, provides IT services and systems integration for the banking industry in China. e-Channels, founded in 2001 by Zeng Shuo, is a software and IT consulting company providing web banking and electronic multi-channel software and solutions to the Chinese banking industry.
Both companies have built substantial reputations within their industry segments with proven management and a successful operating track record. Together these companies will be well positioned to take advantage of the increasing demand for IT solutions and services by the growing Chinese banking industry.