(Yicai Global) Aug.21 --KanHoo Industry, a Chinese manufacturer of materials for lithium batteries, has agreed to buy a company that supplies equipment used to make the rechargeable batteries in a move designed to complement its core business andfurther entrench its position in thefield.

KanHoo Industryhas signed a letter of intent with major shareholders ofShenzhen Yu Chen Automation Equipment to buyfirm, whose market value wasagreed atCNY450 million (USD66 million), the Jiangmen, Guangdong province-based company said in a statement yesterday. KanHoo will pay 35 percent in cash and issue shares for the remainder.

The value of the shares will be calculated based on the company's average share price on the 20 trading days up to yesterday, and will be subject to a three-year lock-up, the statement said.

The deal is conditional onYu Chen Automation having made at least aCNY15 million net profit last year. After the earnings audit and due diligenceconclude, the two parties will sign a detailed equitytransferagreement, the statement added.

Yu Chen Automationsuppliesassembly and test automation equipmentto theworld's major lithium battery makers such as CATL, AVIC lithium power, lithium energy and other domestic customers, as well as Philips of the Netherlands, Germany's WIK,and numerous others.

Editor: Ben Armour