BEIJING, Feb. 8, 2022 /PRNewswire/ -- RISE Education
Cayman Ltd (NASDAQ: REDU) (the "Company") and Data Auto Inc.
("NaaS"), a leading operation and technology provider serving
China's electric vehicle ("EV")
charging market, today announced that they have entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement"),
pursuant to which the shareholders of NaaS will exchange all of the
issued and outstanding share capital of NaaS for newly issued
shares of the Company on the terms and conditions set forth therein
in a transaction exempt from the registration requirements under
the Securities Act of 1933 (the "Transaction"). Upon consummation
of the Transaction, NaaS will become a wholly-owned subsidiary of
the Company.
Transaction Overview
The Transaction values NaaS at an equity value of approximately
$587 million and the Company at an
equity value of approximately $45
million (assuming the conversion of the convertible note
previously issued by the Company to Bain Capital Rise Education IV
Cayman Limited (the "Company Major Shareholders") in the principal
amount of $17 million at the
conversion price that equals $0.7 per
American Depositary Share, each representing two ordinary shares of
the Company, par value $0.01 per
share ("ADS")).
Upon completion of the Transaction, the existing NaaS
shareholders and existing Company shareholders (including holders
of ADSs) will own approximately 92.9% and 7.1%, respectively, of
the outstanding shares of the combined company. Immediately
prior to the completion of the Transaction, the
Company's ordinary shares will be divided into three classes -
Class A ordinary shares, Class B ordinary shares and Class C
ordinary shares - with different voting powers but equal economic
rights. Please refer to the Merger Agreement included as
Exhibit 99.2 to the Form 6-K furnished by the Company to the SEC on
February 8, 2022 for more
details.
The Company's board of directors (the "Board"), acting upon the
unanimous recommendation of the audit committee of the Board (the
"Audit Committee"), approved the Merger Agreement and the
Transaction and resolved to recommend that the Company's
shareholders vote to authorize and approve the Merger Agreement,
the other transaction documents (including the Support Agreement
and the voting agreement (the "Voting Agreement") entered into by
and among the Company, NaaS and the parent company of NaaS) and the
Transaction. The Audit Committee negotiated the terms of the Merger
Agreement and the other transaction documents with the assistance
of its financial and legal advisors. The Audit Committee received a
fairness opinion from its independent financial advisor, China
Renaissance Securities (Hong Kong)
Limited, attesting to the fairness of the consideration to be paid
by the Company in the Transaction, from a financial point of view.
The board of directors of NaaS has approved the Merger Agreement,
the other transaction documents (including the Support Agreement
and the Voting Agreement) and the Transaction.
The Company Major Shareholder, who holds approximately 60% of
the outstanding shares of the Company as of the date of this press
release, has entered into a support agreement (the "Support
Agreement"), agreeing to vote in favor of the Transaction and other
proposals as may be reasonably agreed to by NaaS and the Company as
necessary or appropriate in connection with the consummation of the
Transaction. BCPE Nutcracker Cayman, L.P., an affiliate of the
Company Major Shareholder, has executed agreements to become the
beneficial owner of approximately 1% of NaaS, and beneficially owns
approximately 15.8% of the parent company of NaaS.
The Company and NaaS anticipate that the Transaction will be
completed around mid-2022, subject to the satisfaction of closing
conditions set forth in the Merger Agreement, including among other
things, receipt of Company shareholder approval and regulatory
approvals, including necessary PRC regulatory approvals (if
applicable) and the continuous listing of the Company on the
Nasdaq.
"I am delighted that we have the opportunity to bring these two
companies together. NaaS is a leading player in an interesting
industry with strong management and a proven business model. I
believe this combination will deliver significant shareholder value
and long term growth opportunity to RISE investors,"
said Lihong Wang, Chairwoman and CEO of the
Company.
Cathy Wang, CEO of NaaS,
said, "I am thrilled about this very unique merger opportunity.
Over the past two years, NaaS has grown tremendously with the
tailwind of a booming EV market in China. The combined company will be well
positioned to further this growth trend, with access to capital
market."
The foregoing description of the Merger Agreement, the Support
Agreement and the Voting Agreement does not purport to be complete
and is qualified in its entirety to the full text of the Merger
Agreement, the Support Agreement and the Voting Agreement, which
are included as Exhibits 99.2, 99.3 and 99.4 to the Form 6-K
furnished by the Company to the SEC on February 8, 2022, respectively.
Kirkland & Ellis LLP is serving as U.S. legal counsel to the
Audit Committee. Skadden, Arps, Slate, Meagher & Flom LLP
is serving as U.S. legal counsel to NaaS.
NaaS Overview
NaaS is a leading operation and technology provider serving
China's EV charging market. NaaS
has China's leading comprehensive
EV charging service platform and is a leader in servicing
China's fast charger network. NaaS
also offers hardware, software, and technology services and
solutions to charger operators and works with all members of the EV
charging value chain. NaaS aims to make EV charging easier, better,
and more efficient for all stakeholders, and to promote and ensure
decarbonization and carbon neutrality throughout the automotive
value chain.
About China EV and EV Charging Market
Driven by China's EV support
policy and fast adoption, China is
now the world's largest EV market. In 2021, China's Electric Vehicle ("EV") registered 3.4
million new sales, contributing approximately 52% of global new EV
sales and China market accounted
for approximately 47% of global EV car parc of 16.8
million[1]. With the rapidly growing installed base of
EV and policy support, China EV charging infrastructure is also
under fast development. China
accounted for approximately 62% of the 1.3 million global public
charging poles in 2020 and accounted for similar percentage of
global charging volume[2].
[1]
Source: China Passenger Car Association, IEA - International Energy
Agency
|
[2]
Source: China Passenger Car Association, IEA - International Energy
Agency
|
Forward-Looking Statements
This press release contains certain "forward-looking
statements." These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Statements that are not historical facts, including
statements about the pending transactions described herein, and the
parties' perspectives and expectations, are forward-looking
statements. Such statements include, but are not limited to,
statements regarding the proposed transaction, including the equity
values, the benefits of the proposed transaction, expected revenue
opportunities, anticipated future financial and operating
performance and results, including estimates for growth, the
expected management and governance of the combined company, and the
expected timing of the transactions. The words "will," "expect,"
"believe," "estimate," "intend," "plan" and similar expressions
indicate forward-looking statements.
Such forward-looking statements are inherently uncertain, and
shareholders and other potential investors must recognize that
actual results may differ materially from the expectations as a
result of a variety of factors. Such forward-looking statements are
based upon management's current expectations and include known and
unknown risks, uncertainties and other factors, many of which are
hard to predict or control, that may cause the actual results,
performance, or plans to differ materially from any future results,
performance or plans expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not
limited to: (i) risks related to the expected timing and likelihood
of completion of the proposed transaction, including the risk that
the transaction may not close due to one or more closing conditions
to the transaction not being satisfied or waived, such as
regulatory approvals not being obtained, on a timely basis or
otherwise, or that a governmental entity prohibited, delayed or
refused to grant approval for the consummation of the transaction
or required certain conditions, limitations or restrictions in
connection with such approvals; (ii) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the applicable transaction agreements; (iii) the
risk that there may be a material adverse change with respect to
the financial position, performance, operations or prospects of the
Company or NaaS; (iv) risks related to disruption of management
time from ongoing business operations due to the proposed
transaction; (v) the risk that any announcements relating to the
proposed transaction could have adverse effects on the market price
of the Company's securities; (vi) the risk that the proposed
transaction and its announcement could have an adverse effect on
the ability of NaaS to retain customers and retain and hire key
personnel and maintain relationships with their suppliers and
customers and on their operating results and businesses generally;
(vii) any changes in the business or operating prospects of NaaS or
its businesses; (viii) changes in applicable laws and regulations;
and (ix) risks relating to the combined company's ability to
enhance its services and products, execute its business strategy,
expand its customer base and maintain stable relationship with its
business partners.
A further list and description of risks and uncertainties can be
found in the proxy statement that will be filed with the SEC by the
Company in connection with the proposed transactions, and other
documents that the parties may file or furnish with the SEC, which
you are encouraged to read. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated
or anticipated by such forward-looking statements. Accordingly, you
are cautioned not to place undue reliance on these forward-looking
statements. Forward-looking statements relate only to the date they
were made, and NaaS, the Company and their subsidiaries and
affiliates undertake no obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made except as required by law or applicable regulation.
No Offer or Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the transactions described above and shall not
constitute an offer to sell or a solicitation of an offer to buy
the securities of NaaS or the Company, nor shall there be any sale
of any such securities in any state or jurisdiction in which such
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended, or an exemption
therefrom.
Participants in the Solicitation
The Company, NaaS and their respective directors and executive
officers may also be deemed to be participants in the solicitation
of proxies from the shareholders of the Company in connection with
the proposed transaction. A list of the names of such directors and
executive officers and information regarding their interests in the
proposed business combination will be included in the proxy
statement pertaining to the proposed transaction when it becomes
available for the proposed transaction.
Additional Information and Where to Find It
The Company will file with the SEC and mail to its shareholders
a proxy statement in connection with the proposed transaction.
Investors and security holders are urged to read the proxy
statement when it becomes available because it will contain
important information regarding the proposed arrangement. You may
access the proxy statement (when available) and other related
documents filed by the Company with the SEC at the SEC's website at
www.sec.gov. You also may obtain the proxy statement (when it is
available) and other documents filed by the Company with the SEC
relating to the proposed arrangement for free by accessing the
Company's website at en.risecenter.com by clicking on the link for
"Investors", then clicking on the link for "Featured
Documents."
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SOURCE RISE Education Cayman Ltd