Zoom Technologies Inc. to Acquire Tinho Union Holding Group
January 15 2014 - 4:30PM
On January 13, 2014, Zoom Technologies, Inc. (Nasdaq:ZOOM) (the
"
Company") entered into a Letter of Intent (the
"
LOI") with Tinho Union Holding Group ("Tinho") to
acquire all the outstanding shares of Tinho by issuing
approximately 9.4 million new shares of the Company's common stock
at a valuation of $8.6505 per share to the shareholders of Tinho
(the "
Transaction").
Upon closing of the Transaction, the current shareholders of
Tinho would own approximately 75% of Zoom's ownership interest. The
Transaction is subject to shareholder approval by both parties and
other closing conditions. Among other conditions in the LOI, Tinho
has agreed to make good provisions of after tax net income of RMB
50 million (USD $8.2 million) and RMB 68 million (USD $11.1
million), using current exchange rates, for the years ended
December 31, 2013 and 2014, respectively, on half of the
consideration shares. The LOI calls for the Company to have $27
million of cash in its accounts at the time of closing, and
provides for the Company to use the cash for initiatives if such
initiatives are approved by a majority of the independent
directors. The LOI also contains a binding exclusivity clause,
which will commence on January 15, 2014, pursuant to which the
Company and Tinho have committed to obtaining the approval of the
Transaction during the exclusivity period.
Tinho is a B2B e-commerce platform provider for the travel
industry in China. Tinho's innovative platform aggregates and
streamlines a vast inventory of travel products, including air,
hotels, car rentals, and vacation packages from travel service
providers worldwide to enable customers to easily and accurately
find the best deals in real-time. Tinho also provides full-service,
customized travel solutions to corporate clients. Tinho delivers
its platform through its website (www.thlm.com.cn), a franchise
model, a direct-sale model and 24-hour toll-free call centers.
Founded in 2009, Tinho is headquartered in Shenzhen, China with
over 200 employees.
Maxim Group LLC is acting as the Company's financial advisor in
connection with the Transaction.
On January 4, 2013, the Company sent notice to Beijing Baifen
Tonglian Information & Technology Co., Ltd.
("Baifen") of the termination of the previous
Letter of Intent between Zoom and Baifen, dated November 21, 2013.
The termination was made within the 45 day "Shop
Period", during which Zoom had the right to seek other
potential targets and terminate the Letter of Intent. Zoom's
independent board members voted in favor of entering into a LOI
with Tinho instead of proceeding with the transaction with Baifen
because it believed the terms and conditions offered by Tinho's
shareholders were considered superior to those offered by
Baifen.
Please refer to the Company's Form 8-K filed with the U.S.
Securities and Exchange Commission on January 15, 2014 for further
details regarding the Transaction and copy of the LOI.
Forward-Looking Statements
Certain statements in this press release may constitute "forward
looking statements" that involve risks and uncertainties. These
include statements about our plans, objectives, assumptions or
future events in which the outcome cannot be assured. You should
not place undue reliance on these forward-looking statements.
Information concerning factors that could cause our actual results
to differ materially from these forward-looking statements can be
found in our periodic reports filed with the U.S. Securities and
Exchange Commission. Unless required, we undertake no obligation to
publicly release revisions to these forward-looking statements to
reflect future events or circumstances or reflect the occurrence of
unanticipated events.
CONTACT: Investor Contact:
Investor Relations
Zoom Technologies, Inc.
+86-10-5935-9576
ir@zoom.com