263 Premium 23 times times acquisition of network companies difficult to conceal the impairment of goodwill worries

November 2, 263 (002467, shares bar) (002467, closing price of 10.90 Yuan) issued a notice that the company's major asset restructuring program approved by the SFC, the company intends to purchase 80 million U.S. dollars Italkglobal 66.67% of the equity and associated with the other three company shares. The purchase price will be as high as 23 times times higher than the audited net assets at the end of iTalkGlobal2011.

The reporter noted that 263 completed the acquisition of Italkglobal, the company consolidated financial statements will form about 450 million yuan goodwill. A well-known accountant pointed out that if the acquired assets can not achieve the expected performance and efficiency, a large amount of goodwill impairment or the company's performance caused greater damage. 263 It is clear that this risk will also be faced.

Buy 500 million internet phone companies

26,311 months 2nd issued a major asset purchase report, said the company intends to adopt a wholly-owned subsidiary of Beijing 263 Network Technology Co., Ltd. to cash 80 million U.S. dollars (equivalent to 506 million yuan), buy ITALKHOLDINGSLLC. A stake in the italkglobal66.67% (other than the company's italkglobal33.33% Equity Holdings) and DTMI, Italkbbcanada and italkbbaustralia100%. The source of the transaction is the initial public offering of funds not yet used in the fund 420 million yuan, the insufficient part of the company's own funds to pay.

In this acquisition, Italkglobal 66.67% of the equity is the core asset, the acquisition price of 79.997 million U.S. dollars, while Dtmi, Italkbbcanada and Italkbbaustralia to achieve the deal in early 2012 the formation of a new company, These 3 companies are set up at the cost of the purchase price of 1000 USD/home.

It is noteworthy that the acquisition report shows that as of December 31, 2011, Italkglobal audited net assets of 32.9288 million yuan, the results of this assessment than the par value of the net worth of 2,299%.

The bulletin shows that Italkglobal is an internet-based integrated service provider for overseas Chinese and other Asian ethnic groups based on Internet telephony services. Mainly for the United States, Canada, Australia, Singapore, Chinese-American home users to provide Internet telephony services (ITalkBB). As of June 30, 2012, Italkglobal has more than 210,000 stable users, and maintains an annual growth rate of more than 20%, ITALKBB has become the most influential internet phone brand in the North American Chinese market. In recent years, Italkglobal has also been involved in IPTV (network TV) agency business.

The announcement said that in overseas Chinese market, Italkglobal's core product ITALKBB has the obvious price advantage. ITALKBB in the United States, the world's main push products package price of 24.99 U.S. dollars/month, competitors Vonagebb and AT&TBB monthly package price is also 24.99 U.S. dollars/month, but the international long-distance charges; Verizon Monthly package price of 49.99 U.S. dollars/ Monthly, international long-distance calls also need to charge separately.

In the area of business development, ITALKBB first selected the Chinese more concentrated countries and regions to carry out business, and then gradually expand to other countries and regions. At present, the business has been extended to North America, Australia, Canada, Singapore and a few other countries and regions.

According to Italkglobal original financial statements, 2012 1 ~ September, Italkglobal total net profit of 6.4974 million U.S. dollars (about 41.0701 million yuan), accounting for its 2012 forecast net profit of 10 million U.S. dollars of 66.55%. According to the audit report of Dahua accounting firm, Italkglobal achieved a net profit of 23.6175 million yuan in 2012 1 ~ June, accounting for 42.15% of the net profit forecast in 2012.

For the acquisition of the Italkglobal, founder Securities (601901, shares bar) analyst Wang Hui revealed that the company initially focused on providing VoIP business, in recent years, the company also began to integrated virtual telecom operators to the path to provide users with integrated Internet services, the current business has covered fixed voice, Mobile voice and television business. 263 acquisition of Italkglobal, in the brand, users, business and performance and other four will bring beneficial additions, once our country to open up the people's capital into the basic telecommunications services, the company will occupy the first advantage.

But a TMT industry researcher expressed a different view. He said that Italkglobal's current main business VoIP users only more than 200,000 people, and mainly in the face of ethnic Americans, small market, the future development space may be more limited.

Some original shareholders earn 600 times times 4 years

The reporter noted that, on September 24, 2008, 263 had invested $7.5 million in Italkglobal and gained 6 million shares a preferred stock, which accounted for 33.33% of its total equity, The company also gained an equity stake of Italkglobal to 50% at the same valuation level within three years. On that basis, the company valued Italkglobal at $22.5 million.

According to the estimate, 263 of Italkglobal's valuation amounted to $125.38 million, a figure that was 4 times times higher than the company's valuation in early 2008. It is hard to speculate as to why the company did not choose to increase its share of Italkglobal shares to 50% per cent at the same valuation level within 3 years, but chose to buy it at a higher valuation after 4 years.

In response to the above problems, the reporter contacted 263 companies by telephone, but the company's securities staff said they did not understand the situation, and the company Dong Liujiangtao and the Li is still in the meeting.

Unable to learn 263 points of view, the reporter consulted on the above question a certified public accountants in a well-known international accounting firm, the accountant after a careful review of the 263 issued by the assessment Report, 263 pairs of italkglobal used the income method and the market law two methods of valuation respectively, The income method is calculated on the basis of its own forecast data, and the market law is based on the data of "8x8", "Comcast", "Vonage", three listed companies in the same industry and the external P/E ratio, which is independent from the data source. The valuation results show that the evaluation value of the two methods is not significant, indicating that the report should be more reasonable, unless the data collection on the same time error, otherwise generally will not lead to deviations in results.

The accountant also pointed out that the report is more rigorous, can not find the existence of a larger loophole, but the future of the forecast data there is a certain subjective factors, the selection of comparative data of comprehensiveness and rationality has yet to be verified. In addition, the Valuation Report assessment base date is December 31, 2011, although not more than a year of validity, but the acquisition has lasted more than 10 months, market conditions, such as change, will not be reflected in the assessment report in time.

Remarkably, in this transaction, the most profitable party is not italkglobal original shareholder. The acquisition report shows that Italkglobal was founded in 2003, including Williama.burge, Jiezhao, Shi Lin, Cho Hao, and many other original shareholders to 0.1 U.S. dollars/shares of the price of investment shares. Subsequently, Italkglobal experienced a number of additional, equity transfer. As of this acquisition, a total of 17 natural persons through Italkholdings holding Italkglobal 12 million shares, accounting for their total share capital of 66.67%.

Since Italkglobal had a stock split in 2007, the previous shares were divided into 10 shares, so the cost per share of the original shareholders such as Lin, Cho Hao and so on was diluted to about 0.01 U.S. dollars/shares, and this 263 acquisition of 12 million shares of the price of 80 million U.S. dollars, about 6.67 U.S. dollars/ Unit。 According to this calculation, Shi Lin, Cho Hao, such as several original shareholders will be in this transaction more than 600 times times the proceeds.

The hidden trouble of goodwill impairment in profit compensation

It is noteworthy that in this huge acquisition case, the asset transfer party to the underlying assets made a profit compensation commitment.

The two parties agreed that the Italkglobal purchase price should be paid in two phases. The settlement date pays 70% of the purchase price, and if the audited net profit reaches 7 million U.S. dollars 2012 years ago, the remaining 30% of the purchase price is paid. If the 2012 net profit does not reach 10 million U.S. dollars, the net profit achieved and the difference between 10 million dollars will eventually be returned to 263.

In addition, Italkglobal holding shareholder, the actual controller Bruce Lee also signed the "Profit forecast compensation agreement" with 263, the promised assets 2012, 2013, 2014 of the net profit will not be less than 10 million U.S. dollars, 13 million U.S. dollars and 15 million U.S. dollars, And will be in 2013, 2014 to achieve the profit forecast part of the net profit to make cash compensation. The amount of compensation for the 2013 and 2014 cumulative net profit implementation and forecast part of the difference of 66.67%. The amount of compensation will be paid within 20th of the annual report issued in 2014.

The more impressive performance pledges and profit compensation seem to suggest that the acquisition of Italkglobal is a "steady profit" business. However, the reporter noted that after the completion of the acquisition of the 263 Italkglobal, the company consolidated financial statements will form about 450 million yuan goodwill, and this huge goodwill fear is the biggest hidden risk of this transaction.

Ma Jinghao, a well-known accountant, pointed out in an interview that the goodwill brought by this highly premium acquisition often brings a greater risk of impairment to the acquirer. Goodwill refers to the potential economic value of bringing cash inflows or excess profits to the business in the future, and if the acquired assets fail to achieve the expected performance and benefits, even if the assignee makes a profit-compensation commitment, it looks like it can make up for a considerable amount of profit that has not been achieved for some time, But it may bring the goodwill impairment or the company's performance caused greater damage.

Comprehensive 263 prospectuses and annual reports, the company 2007-2011 years of net profit of 67.41 million yuan, 69.16 million yuan, 70.13 million yuan, 69.25 million yuan and 71.25 million yuan, stable in 70 million yuan, the acquisition will form the 450 million yuan goodwill is the company five years annual profit of more than 6 times times.

To enter the network TV market

Just four days after the 263 acquisition of Italkglobal, the company again threw out a takeover plan, which was still a company with a net worth of negative assets.

26,311-month 6th announcement, to 53.38 million yuan to acquire Beijing Capital Online Network Technology Co., Ltd. (hereinafter referred to as the capital online) 70.23% equity and to its completion of 100% holdings. Capital Online 2012 1 ~ May revenue of 5.2831 million yuan, net profit of 4.3212 million yuan loss. As of the benchmark date of May 31, 2012, the capital online net worth of 1.5959 million yuan, but its shareholders all rights and interests assessment price is as high as 76 million yuan.

The acquisition of capital Online also has a promise of profit compensation. The announcement shows that the transaction promises, the capital online November 2012, December total loss of not more than 5.36 million yuan, 2013 annual loss of not more than 12.77 million yuan, 2014 annual after-tax profit of not less than 21.18 million yuan, if not realize the promised profits, The difference will be replenished with cash from the capital online.

The announcement shows that the capital online originally engaged in open-screen media business, accumulated a large number of customers and internet marketing advertising as the main source of income. Since July 2011, the capital online transformation mainly engaged in the North American area of IPTV (network TV) business, and Italkglobal established a cooperative relationship, and has built a leading IPTV operating platform and rich content cooperation channels, the development of more than 30,000 North American home users.

263 in the announcement, the company is in the context of the overall merger and acquisition of Italkglobal, the IPTV business as a italkglobal of the future of the core business, to meet the trend of the integration of the three networks, fully develop synergies to bring new business and profit growth opportunities. Because the network Technology user group and the Italkglobal user group are more consistent, therefore through the promotion IPTV service in the Italkglobal user, may increase the Italkglobal user the stickiness, simultaneously also brings the additional value-added service revenue, forms the synergy effect.

For 263 of the above business planning, the TMT industry researcher pointed out that due to the strong construction of China's broadband network, in recent years, network television in the domestic development quickly. But 263 of the two companies currently acquiring IPTV services mainly face the overseas Chinese market, especially in North America. "The current market segment is not well understood, but high-definition video technology is growing fast, especially in the United States." For example, once Apple launches a new generation of Apple, it is likely to lead to a massive loss of 263 of existing users. The TMT industry researcher said.