Harbin Electric to go private in a $744 million buyout from its CEO
21 Jun 2011
Harbin Electric Inc, yesterday agreed to be taken private by its chief executive and a private equity firm in a deal that values the Chinese electric-motor maker at $744 million.
Harbin has entered into a definitive merger agreement with Tech Full Electric Company, a Cayman Islands company that is indirectly wholly owned by the company's chairman and CEO, Tianfu Yang and Tech Full Electric Acquisition, Inc, a Nevada-based subsidiary of Tech Full Electric.
Tianfu, who holds about 31 per cent of Harbin has teamed up with PE firm Abax Global Capital to buy remaining the shares of Harbin at $24 per share in cash or $744 million, almost triple the stock value at the end of last week.
The deal comes just a week after the company's stock price nosedived after Citron Research in its report asked the US Securities and Exchange Commission to halt trading of Harbin shares after it raised questions about the accuracy of its reported net income.
Harbin Electric, headquartered in Harbin, China, is a developer and manufacturer of a wide range of electric motors. Its major product lines include industrial rotary motors, linear motors, and specialty micro-motors.
Its domestic and international clients includes those in the energy industry, factory automation, food processing, packaging, transportation, automobile, medical devices, machinery and tool manufacturing, chemical, petrochemical, metallurgical and mining industries.
The company operates four manufacturing facilities in China located in Xi'an, Weihai, Harbin, and Shanghai.
"While the events that negatively affected the company's stock price over the past few months have left all shareholders unhappy and frustrated …..a significant amount of information that is false and misleading as well as defamatory has been introduced into the market, and has clearly affected market trading of the company's stock. The Company is prepared to take all necessary legal action against those who have made such statements," said Yang.
