(Yicai Global) Sept. 8 -- Chinese traffic information system developer Anhui Wantong Technology Co. [SHE:002331] (AWT) plans to acquire a Sichuan-based producer of electronic military products for USD66.3 million (CNY430 million) by issuing shares.
AWT will distribute stock to shareholders of Chengdu Sine Science and Technology Ltd. (CSST) via private placement to acquire a 100 percent stake in the latter for USD66.3 million, AWT announced yesterday.
It will also issue shares to targeted investors to raise up to USD30.22 million to pay for transaction intermediary costs and help CSST build radar production lines.
CSST is a defense company that researches, develops and produces microwave integrated circuits and radars using microwave and digital technologies, with its products used in aircraft, warships, missiles and other types of weapons platforms, per the announcement.
With technologies accumulated in the microwave field over the past decade, CSST can develop customized software, and its products lead other similar Chinese products in terms of performance, AWT stated. Its partnership with CSST, a leading player in China's traffic information technology sector, can help the latter crack the civilian market for its radar products, AWT added.
The acquisition is in line with the national policy of developing dual-use technology that has both civilian and military applications, AWT noted. CSST can leverage the listed company's capital platform to strengthen its research and production capability, while AWT can enter the electronic defense field, which enjoys good prospects, it added.