Cheetah Mobile Completes Investments in AI
Technology Company
BEIJING, October 2, 2017 /PRNewswire/ -- Cheetah Mobile
Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading
mobile internet company that aims to provide leading apps for
mobile users worldwide and connect users with personalized content
on the mobile platform, today announced that the shareholders of
Kingsoft Corporation Limited ("Kingsoft") have approved the
delegation of approximately 38% voting power of Cheetah Mobile held
by Kingsoft to Mr. Sheng Fu, chief
executive officer and director of Cheetah Mobile ("Mr. Fu"),
effective October 1, 2017.
To the Company's knowledge, Mr. Fu intends to separately enter
into a voting proxy agreement with Tencent, pursuant to which Tencent will delegate to Mr. Fu certain voting
power of Cheetah Mobile. Upon the completion of both the Kingsoft
and Tencent delegations, Mr. Fu and
other Cheetah management members will hold over 50% of voting power
and approximately 10% of equity interests in Cheetah
Mobile.
In addition, the shareholders of Kingsoft have approved a
capital injection agreement, which the Company previously announced
on May 26, 2017. Pursuant to the
capital injection agreement, a wholly-owned subsidiary of Cheetah
Mobile subscribed to newly issued equity interest in Beijing
OrionStar Technology Co., Ltd. ("Beijing OrionStar") for a
consideration of approximately US$40
million. Beijing OrionStar is an artificial intelligence
technology company incorporated in China and controlled by Mr. Fu. This
transaction was completed on September 30,
2017. As a result, Cheetah Mobile holds approximately 30% of
equity interest in Beijing OrionStar and has a two-year warrant to
subscribe to additional equity interests at the same valuation to
achieve controlling position.
Mr. Fu stated, "I appreciate Kingsoft's trust and confidence in
Cheetah Mobile's management team. By holding over 50% of voting
power in the Company, we will have more independence and
flexibility in executing our long-term growth strategy. The
investment in Beijing OrionStar will also help Cheetah Mobile
become one of the top players in AI technologies and roll out its
own AI based products and services in the near future."
Background Information
On February 12, 2017, Kingsoft
entered into a voting proxy agreement with Mr. Fu, delegating
certain voting rights of Cheetah Mobile to Mr. Fu. The
effectiveness of the agreement was subject to Kingsoft's
shareholder approval and signing of a definitive agreement between
Mr. Fu and Cheetah Mobile in relation to Beijing OrionStar
technology company.
On May 26, 2017, Beijing Kingsoft
Internet Security Software Co., Ltd. ("Beijing Security"), a
wholly-owned subsidiary of Cheetah Mobile, entered into a capital
injection agreement with Beijing OrionStar. Pursuant to the
Capital Injection Agreement, Beijing Security, Pingtan Dingfu, and
Kangyuan Heart agreed to subscribe to newly issued equity interest
in Beijing OrionStar for a consideration of approximately
US$40 million, US$0.4 million, and US$0.35 million, respectively, payable in cash.
Within two years after the completion of the transaction, Beijing
Security is entitled to a warrant to subscribe to newly issued
equity interest in Beijing OrionStar in the future with an
equivalent value of up to US$62
million at the same unit subscription price as the current
investment, subject to certain conditions and adjustments as
provided in the Capital Injection Agreement. If the warrant is
exercised in full, Beijing Security is expected to hold over 50% of
equity interest in Beijing OrionStar, assuming that there will be
no other change in the shareholding structure of Beijing
OrionStar.
About Cheetah Mobile Inc.
Cheetah Mobile is a leading mobile internet company. It aims to
provide leading apps for mobile users worldwide and connect users
with personalized content on the mobile platform. Cheetah Mobile's
products, including its popular utility applications Clean Master,
Security Master and Battery Doctor, help make users' mobile
internet experience smarter, speedier, and safer. Leveraging the
success of its utility applications, Cheetah Mobile has launched
its line of mobile content-driven applications, including News
Republic and Live.me.
Cheetah Mobile provides its advertising customers, which include
direct advertisers and mobile advertising networks through which
advertisers place their advertisements, with direct access to
highly targeted mobile users and global promotional channels, which
are capable of delivering targeted content to hundreds of millions
of users.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements, including management quotes and business outlook,
constitute forward-looking statements under the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by terminology such as "will,"
"expects," "anticipates," "future," "intends," "plans," "believes,"
"estimates" and similar statements. Such statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in the
forward-looking statements, including but are not limited to the
following: Cheetah Mobile's growth strategies; Cheetah Mobile's
ability to retain and increase its user base and expand its product
and service offerings; Cheetah Mobile's ability to monetize its
platform; Cheetah Mobile's future business development, financial
condition and results of operations; competition with companies in
a number of industries including internet companies that provide
online marketing services and internet value-added services;
expected changes in Cheetah Mobile's revenues and certain cost or
expense items; and general economic and business condition globally
and in China. Further information
regarding these and other risks is included in Cheetah Mobile's
filings with the U.S. Securities and Exchange Commission. Cheetah
Mobile does not undertake any obligation to update any
forward-looking statement as a result of new information, future
events or otherwise, except as required under applicable law.
Investor Relations Contact
Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: helenjingzhu@cmcm.com
ICR, Inc.
Xueli Song
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
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SOURCE Cheetah Mobile