Harbin Electric (HRBN) Rallying on Agreement to Acquire Xi'an Simo Motor
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Earlier, Harbin Electric, Inc. (Nasdaq: HRBN) today announced that Harbin Tech Full Electric Co. Ltd., a wholly owned subsidiary of the Company, has entered into a definitive Agreement dated as of October 2, 2009 to acquire Xi'an Simo Motor Incorporation, one of China's leading electric motor companies.
Pursuant to the terms of the Agreement, Harbin Tech Full has agreed to acquire 100% of the outstanding shares and all of the corresponding assets of Simo Motor in consideration for the payment of a purchase price equal to no less than six (6) times and no more than eight (8) times the 2008 audited net profits of Simo Motor. The closing of the acquisition is conditioned upon the completion of the registration of the share transfer with the requisite PRC authorities, which is expected to occur within the next 25 business days. The Company expects this acquisition to be earnings accretive immediately. The Company intends to utilize a portion of the proceeds from the public offering it completed in August 2009 to finance the payment of the purchase price.
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