PacificNet (PACT.PK) has entered into a definitive agreement to acquire a majority interest in Beijing iMobile, one of the Internet information portal and e-commerce distributors for mobile phones and accessories and mobile related value-added service providers in China.

The acquisition is expected to close during the first quarter and to be accretive to PacificNet's earnings in 2006.

iMobile operates its e-commerce business via two Internet portals– and–and one WAP portal for mobile phone browsing.

In addition, iMobile's operation is the designated Internet distributor for Motorola, Nokia, and NEC's mobile products in China. is the leading Internet e-commerce distributor of mobile products in China, and provides Internet, email, customer service centers, pre-sale and post-sale services, logistics and cash-on-delivery (COD) services to mobile related products in China.

iMobile's Internet portal has been one of the top ranked traffic sites and has achieved about 2.3 million registered online users and over 400,000 active users, with 5 million daily page views and 20,000 blog postings per day, which

makes iMobile the top ranked site in its category in China.

The purchase consideration for 51% of the equity interest of iMobile is approximately US$1.8 million, which represents approximately seven times the anticipated future annual net income of iMobile.

The purchase consideration is payable 14% in cash and 86% in restricted shares of PACT valued atUS$8 per

share, or about 172,000 restricted shares.

Under the purchase agreement, iMobile has committed to generate US$500,000 in annual net income. In the

event of a shortfall, the purchase price will be adjusted accordingly.

PacificNet will also invest approximately CNY 2 million in iMobile for general corporate and working capital purposes to support growth. The purchase price is payable upon achievement of certain quarterly earn-out targets based on net income.


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