(Yicai Global) May 26 -- Chinese industrial automated test equipment supplier and complete system services provider Suzhou HYC Technology has got the preliminary nod to acquire the assets of Suzhou Oulitong Automation Technology for CNY1 billion (USD140 million) in the Shanghai Stock Exchange Star Market’s first merger and acquisition, the company announced yesterday.

It will issue shares and raise supporting funds to effect the takeover, per the approval received in a notice from the Nasdaq-style sci-tech board’s listing review center that same day, The Paper reported today. HYC listed on the sci-tech bourse 10 months ago.

The firm was seeking to buy a 100 percent stake in the smart assembly and test equipment producer by issuing shares and paying cash, it announced in December.

The parties to the acquisition fixed the value of the underlying assets at CNY1 billion, of which 70 percent, or CNY728 million (USD102 million) will be paid by issuing shares, and 30 percent, or CNY312 million, laid down in cash, per a statement HYC released on May 14.

The firm also plans to raise up to CNY532 million in funds via a private placement, the proceeds of which, issuance fees deducted, will defray the costs of the underlying assets and restructuring expenses, supplement its working capital, and go towards the target’s project construction.

A registration system applies to M&As on the Star Market, so HYC must field queries from the SSE in its review opinion of the target’s first-quarter financial data and profit forecast after the target passes the SSE’s review. The exchange will then refer the M&A to the China Securities Regulatory Commission for registration after receiving the company’s reply. The M&A will then go through if the CSRC approves it.

HYC mainly researches and develops, produces and sells test devices for flat panel displays and integrated circuits. Its primary products are used in liquid crystal displays and organic light-emitting diode flat panel displays, integrated circuits and automotive electronics. The firm does business in China and abroad.

Editor: Ben Armour