Xinwei Solar Power Engineering (Suzhou) Co., Ltd., (Xinwei Solar), a wholly-owned subsidiary of SPI Solar, has entered into a framework purchase agreement for the acquisition of a 100% equity interest in Shanghai All-Zip Roofing System Group Co., Ltd. (All-Zip Roofing) with All-Zip Roofing and its owners, including five private equity investors.
All-Zip Roofing is a provider of comprehensive roofing solutions in the China market. It focuses on energy conservation and environmental protection and holds several key patents concerning roofing. It has played a key role in the development and drafting of national roofing standards in China, and established the first industry association for roofing in the country.
Xiaofeng Peng, Chairman of SPI, commented, “We aim to leverage our high-quality, low-cost development services and All-Zip Roofing’s experience in the roofing business to become the leading DG business in China. All-Zip Roofing’s dominance in Eastern China, one of the fastest growing markets for DG, will increase our access to an especially promising market.”
Subject to the conditions of the agreement, SPI Solar intends to acquire All-Zip Roofing for an aggregate purchase price of 11 times the earnings of All-Zip Roofing, based on its audited financial statements for 2014, or approximately RMB330.0 million. Consideration for the acquisition will consist entirely of SPI ordinary shares valued at a price of US $2.38 per share, and will be calculated based on the exchange rate at October 28, 2014. Prior to the acquisition, All-Zip Roofing will engage in an off-shore and on-shore reorganization. Upon the completion of the reorganization, Xinwei Solar will acquire All-Zip Roofing. The closing date of the transaction is expected to occur 10 working days after the date that all closing conditions are fulfilled.
