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Shenzhen Kaizhong Precision Technology Co. Ltd. Makes Superior Proposal to Acquire Pacific Insight Electronics Corp.

SHENZHEN, China, Sept. 06, 2017 (GLOBE NEWSWIRE) -- Shenzhen Kaizhong Precision Technology Co. Ltd. (“Kaizhong” 002823.SZ) is pleased to announce that it has made a binding superior proposal (the “Superior Proposal”) to acquire all of the issued and outstanding shares of Pacific Insight Electronics Corp. (TSX:PIH) (“Pacific Insight”) for cash consideration of $24.35.  The Superior Proposal ascribes a value to Pacific Insight of $189.5 million on a fully diluted basis, which represents a 31.6% premium to the price offered by Methode Electronics, Inc. (“Methode”) pursuant to the transaction contemplated by the arrangement agreement (the “Methode Agreement”) dated August 1, 2017 (the “Methode Transaction”), and a 131.9% premium to Pacific Insight’s share price on the Toronto Stock Exchange on July 31, 2017, the trading day immediately prior to the announcement of the Methode Transaction. 

Kaizhong’s Chairman, Mr. Haoyu Zhang, stated “We are pleased to make a binding offer to acquire Pacific Insight at a valuation that we believe provides full value for shareholders.  We believe our proposal is more compelling for shareholders than the Methode Transaction, and are committed to working diligently to completing our proposed transaction as expeditiously as possible”. 

The Superior Proposal will be funded by Kaizhong using its available cash on hand and the proceeds of a loan facility which has been committed by GF Securities Co., Ltd. (“GF Securities”), a leading investment bank in China. 

Kaizhong proposes to complete the transaction represented by the Superior Proposal on substantially the same terms as are set out in the Methode Agreement.  In particular, the Superior Proposal will be subject to similar conditions precedent for closing with respect to applicable regulatory approvals, which in the case of the Superior Proposal will require:

(a)    shareholder approval of Kaizhong to be obtained at a special meeting of shareholders to be convened as soon as practicable following the execution of a definitive agreement, pursuant to which Kaizhong has already obtained the written approval of shareholders holding more than two-thirds of the issued and outstanding shares of Kaizhong; which means there is no uncertainty with respect to shareholder approval for the proposed transaction. 

(b)    completion of filings with the municipal branches of the National Development and Reform Commission and the Ministry of Commerce of the People's Republic of China with respect to the Proposed Transaction. 

Kaizhong estimates that it will be able to satisfy the foregoing conditions precedent and complete the transaction represented by the Superior Proposal by December 31, 2017. 

About Shenzhen Kaizhong Precision Technology Co. Ltd.

Headquartered in Shenzhen, Kaizhong is the largest commutator supplier in China and the second largest globally.  It is a leader in R&D, manufacturing, and sale of a wide portfolio of commutators, slip rings, and connectors.  Its products are used in the automotive, aerospace, medical, and household electronic sectors.  It is a strategic supplier to world renowned OEMs and Tier 1 suppliers including BOSCH, Daimler, Continental, and ASMO.  Its global distribution network covers countries such as Germany, Switzerland, France, Mexico, the U.S., Japan, India, and China.

In May 2016, Kaizhong acquired a related business of Sideo Vogt, which is a Tier 1 supplier of Daimler in precise high elastic spare parts.  The acquired business has been Daimler’s supplier for 100+ years.  Post-transaction, we injected fresh capital and brought in new long-term customers to the acquired business.  Local management retained its autonomy and operational independence.

Kaizhong’s 2016 revenue was US$167mn and EBITDA US$29mn.  It is listed on the Shenzhen Stock Exchange with market capitalization of US$817 million (as of September 5, 2017).  Kaizhong is not a state owned enterprise nor is it affiliated with any state owned enterprises in the People’s Republic of China. 

On behalf of the Board of Directors of Shenzhen Kaizhong
Precision Technology Co. Ltd.

SHENZHEN KAIZHONG PRECISION TECHNOLOGY CO. LTD.
Furong Ind. Zone, Xinqiao, Shajing, Baoan, Shenzhen, Guangdong, China, 518125

For more information please contact our financial advisor:
                    
                    Michael Sun, Director
                    GF Securities
                    Email: michaelsun@gfgroup.com.hk
                    Telephone: +852 3719 1139

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