Affluent Partners has conditionally agreed to purchase 33 per cent of the entire issued share capital of Dellos Group, at the aggregate consideration of HKD79.2 million.
Dellos Group is an investment holding company incorporated in the Cayman Islands with limited liability.
Currently, it holds the entire equity interest of Dellos BVI, which is an investment holding company incorporated in the BVI with limited liability, which in turns holds the entire equity interest of Dellos Korea and Dellos Hong Kong.
Dellos Korea is a limited liability company incorporated in Korea. It is principally engaged in the manufacturing, sale and distribution of fruit juice and other beverage products. The products of Dellos Korea can broadly be divided into can beverages, bottle beverages and fruit jams, under the established brand of "Dellos". Currently, these products are sold in Korea and over 40 other countries around the globe, spanning European Union, Russia, Middle Asia, South America and Africa.
Recently, Dellos Korea has been actively expanding its distribution channels in the Korean domestic market. In 2016, Dellos Korea entered into a direct sales agreement with a convenience store chain in Korea, pursuant to which, particular "Dellos" beverage products will be sold through its chain of convenience stores across the country. In 2016, Dellos Korea also entered into supply agreements with the Korea government for the provision of juice products to certain government departments. Apart from its own brand products, Dellos Korea also provides original equipment manufacturing (OEM) services to a number of reputable and large-scale beverage companies.
Dellos Korea jointly developed nano water-soluble technology with an independent third party. This technology is applied to the manufacturing process of their beverages, which in turn, enable the beverage products to enhance the digestive and absorptive functions of human body.
Dellos Korea has its own manufacturing facilities in Wonju-si, Gangwon-do, Korea with a total land area of 9,103 square meters. In addition, Dellos Korea has obtained a number of international professional certificates.
According to the agreement, the total consideration shall be satisfied by a cash payment of HKD3.5 million and the allotment and issue of approximately 19.9 million consideration shares in the aggregate value of HKD75.7 million at the issue price of HKD3.81 per consideration share to the vendors. The issue price represents a premium of approximately 1.33 per cent over the closing price of HKD3.76 per share, as quoted on the stock exchange yesterday.
There is a profit guarantee attached to the agreement, which shall be capped at 35 per cent of the consideration.
Lan Zhi Cheng, chairman of the group, says: "We believe that, through the acquisition, the group will be able to strengthen the existing business portfolio, engage in a new line of business with growth potential and broaden its source of income. We regard the future prospects of Dellos Group Limited as promising and based on the historical and estimated financial performance of Dellos Group Limited, we have confidence that it has the potential to seek listing of its shares on the stock exchange or other qualified stock exchange in the medium term."
