Hollysys Automation Technologies, Ltd., a BVI-registered company providing automation and control technologies and solutions in China, has signed a stock purchase agreement for the acquisition of full ownership of Bond Corporation Pte. Ltd. and its group of companies. Bond Corporation Pte. Ltd. is a holding company registered in Singapore and having strong presence in Southeast Asia, providing complete mechanical and electrical solutions in design, engineering, procurement, project management, construction and commissioning, and maintenance to a wide array of industries. Company’s subsidiaries are Bond M&E Pte. Ltd. incorporated in Singapore, and Bond M&E Sdn. Bhd. and Bond M&E (K.L.) Sdn. Bhd. incorporated in Malaysia.
The total consideration for the acquisition is cash and stock combination, aggregating an equivalent of approximately US$73 million, and including a two-year incentive program if Bond meets certain performance targets. Under the terms of the stock purchase agreement, the BVI company will pay a fully refundable cash deposit of US$ 16.39 million within one month, and an additional US$ 5.51 million within 6 months and US$ 14.6 million within 18 months after signing the agreement.
After closing the transaction, Hollysys will issue its ordinary shares worth US$ 14.60 million (40% of total share consideration) to the shareholders of Bond. They will also receive Hollysys ordinary shares worth US$ 10.95 million (30% of total share consideration) as incentive shares in each of the next two fiscal years if Bond’s US-GAAP audited net income equals or exceeds US$ 8.81 million and US$ 10.57 million for fiscal years 2013 and 2014, respectively. The Bond shareholders will also receive additional ordinary shares, not more than 15 per cent of the total incentive shares, if Bond outperforms the mentioned targets.
Both parties have agreed upon the compensation and incentives to be received by the management team of Bond to maintain the team stability after the acquisition.