Branch Crown Wood Acquisitions Beijing is interesting, the transaction price raises the question

Branch Crown Wood Industry March 24 issued a notice, the company intends to 53.13 yuan/share of the price to deal with the total issue of 51.9106 million shares, and pay 791 million yuan in cash, the acquisition of Beijing Wit Network Technology Co., Ltd. (hereinafter referred to as "fun") 95% of the equity, Rechamp (Beijing) Technology Co., Ltd. (hereinafter referred to as "Rechamp technology") 100% of the Equity, Avazu Inc. and Shanghai Wheat Orange Network Technology Co., Ltd. (hereinafter referred to as "Shanghai Wheat Orange") 100% of the equity, transaction pricing amounted to 3.549 billion yuan.

At the same time, the division crown Wood Industry to 47.82 yuan/share of the price of the proposed to not more than 10 specific investors issued not more than about 19.2249 million shares, raise not more than 919 million yuan. The matching funds raised will be used to pay the transaction cash, transaction costs and replenishment of the company's liquidity.

Based on the assessment results published by the division crown Wood Industry, the base date for assessment as at October 31, 2014, The book value of the total assets of wit is 74.905 million yuan, the value of all the stockholders ' equity after the evaluation is about 620.116 million yuan (take two different methods of evaluation, the same below), the value added amount is 551.9298 million yuan, the value-added rate is 809.45%. The book value of Rechamp science and technology total assets is 58.6479 million yuan, the value of all stockholders ' equity after evaluation is about 880.185 million yuan, the value-added amount is 848.7913 million yuan, and the value-added rate is 2703.70%;avazu Inc. The book value of total assets is 125.561 million yuan, the value of all the stockholders ' equity is about 2,069,378,100 yuan, the evaluation value is 1,993,473,100 yuan, the value-added rate is 2626.27%. The book value of the total assets of Shanghai wheat and Orange is 3.1805 million yuan, the value of all the stockholders ' equity is about 10.8116 million yuan, the evaluation value is 10.1046 million yuan, and the value-added rate is 1429.23%. This means that the four companies on the basis of the evaluation of the total amount of assets on the book value of only 262.2944 million yuan, and the branch of the wood industry has issued a high price of 3.549 billion yuan, a premium of up to 3.287 billion yuan, the total value-added rate is more than 1250%, staggering.

In this respect, some market participants to the "economic reference" reporter, due to the market environment, the recent market high premium mergers and acquisitions phenomenon. On the one hand, some enterprises can not meet the financing needs, only the choice of via to achieve curve listing; On the other hand, some listed companies also have the demand of market value management, need consciously to create capital events, pushing up the stock price.

According to the material published by the division Crown Wood, is a game based on the development of mobile games, both client and web game companies; Rechamp technology is mainly engaged in mobile end and web-side military class SLG strategy game development and distribution; Avazu Inc. and Shanghai Wheat Orange Company belong to the technical Service outsourcing mode of cooperation. The former is mainly engaged in internet advertising business, the latter is focused on the Internet advertising platform for Technical support, website operation and maintenance, database management update, Operation interface optimization, customer consulting and Operation training services and other support services.

Some market analysis that the game and Internet assets in recent years by the market hot, mergers and acquisitions prices all the way. Although the branch crown Wood to buy the above assets at a high premium, but from the long-term development of the company, will help the division Crown Wood Rapid Transformation, and form a mature internet business capabilities. In this respect, branch crown Wood Industry said, the merger is conducive to continue to enhance the listed companies mobile network game product development capabilities, and further improve the product types and products of the global regional layout; in favor of the company through the capital market platform, in the field of Internet business extension, enrich the business sector.

The evaluation materials provided by the division Crown Wood show that the four companies have achieved significant revenue and profit growth during the evaluation period (i.e., 2012, 2013, 2014 1 to October) and maintained a rapid development momentum. For example, Avazu Inc. During the evaluation period, the revenue was 29.3538 million yuan, 164.7852 million yuan and 255.4259 million yuan respectively, and net profit was 4.5142 million yuan, 56.6885 million yuan and 67.5361 million yuan respectively.

However, market participants interviewed by the economic reference report said that, despite the steady growth of the four companies, the total price of 3.549 billion yuan and the total value of assets worth more than 12 times times were unexpected and incomprehensible. In fact, before the division Crown Wood High Premium acquisition of God interaction and other assets, there have been investors have questioned the voice.

In this connection, the economic reference newspaper tried to contact the division crown Wood Industry in-depth interview, but as of press, the other side of the phone has not been answered. Subsequently, the reporter again in the form of mail, Shanko wood industry to make an interview request, but as of press when not received branch crown Wood industry response.

However, the branch coronal wood Industry bulletin said, "throughout the development of the Internet industry, the internet industry well-known companies such as Tencent, Baidu, etc. through the extension of mergers and acquisitions and other means of expansion to establish a number of business sectors, multi-brand mode of operation, and eventually grow into a global well-known enterprises. Listed companies hope to learn from this successful model, through mergers and acquisitions to the goal of first-class Internet enterprise groups, while creating a sustained and stable performance returns for shareholders. ”

There are also market analysis that, although the acquisition of the above four companies in the premium level compared to other industry acquisition cases is relatively high, but the current market, games and Internet concept assets of the purchase price all the way up, the average asset appreciation rate of more than 10 times times. So the division crown Wood Industry this time the transaction price is not exaggerated.

But some insiders said to the economic reference newspaper, "a company often relies on one or two games to achieve profitability, and each game cycle is very limited, whether it can continue to profit, it is difficult to say." In addition, due to the game market in recent years, more and more developers to enter the industry, but the distribution channels are increasingly concentrated in the hands of a small number of giants, want to emerge from a number of games in the difficulty is increasing. As a result, the likelihood of a single game company keeping long-term profitability is diminishing. "The person also pointed out that from the current domestic mainstream distribution channels of the game, the division crown Wood to buy the company's game products, in the rankings are not in front, which means the company's future development prospects are not clear."

Another market personage explained, due to the market environment, the recent market high premium mergers and acquisitions phenomenon. Some listed companies have the market value management needs, the need to consciously create capital events, stabilize or further push up their own stock prices.

October 11, 2013 division crown Wood before the suspension, the stock price for a long period of 15 yuan per share, and then the company because of the restructuring of the suspension, January 15, 2014 announced the merger of the gods and the reorganization of the interactive plan, the company's stock price for 13 consecutive trading days, and in less than two months, The stock price soared to 56.35 yuan per share, then, branch coronal wood stock price concussion lower, once maintained at 45 yuan per share level. October 30, 2014, due to the planning of the division crown Wood Industry again suspended, the same day the division Crown Wood Stock reported to be closed at 57.50 yuan per share. After the announcement of the acquisition of the above four companies, March 24, 2015 after the company's shares after the card has 5 consecutive trading days limit. As of March 30, the company's share price has reached $92.61 per share, up 61.06% from the previous suspension.