(Yicai Global) Sept. 10 --A-share listed ink coating developer Letong Chemical will buy Singapore-based Precision Capital, one of the world's biggest harddiskdrive component makers,for CNY2.4 billion (USD350 million) to break into the data storage field, the Zhuhai, Guangdong province-based companyannounced yesterday.

Itplans to acquire 100 percentof Wuhan Zhongke Xinwei Information Technologyvia theissueand cash payments to five ofitsshareholders. CNY2.2 billionwill be in the form of sharesand CNY200 million(USD29 million) incash. The issue price ofthestock is CNY16.31(USD2.40)per share, LetongChemicalannounced yesterday.

Zhongke Xinwei is a shareholding investment company. Its real assets are the 100 percent equity of Precision Capital, whichisits wholly-ownedunit, the announcement said.

Zhongke Xinwei, Precision Capital and Precision Capital's original shareholder MMI Technologies signedthe agreementon July 18.Zhongke Xinweiwill get100 percentof theequity of Precision Capital MMI Technologiesholds forUSD245 million,and willearmark USD45.13milliontoaddfunding toPrecision Capital, and buya stake inittothe tune ofUSD290.13 million The transaction has notyetwrappedup.

Precision Capital's mainclients areglobal famous HDD manufacturersof the ilk ofthe USSeagate TechnologyandWestern Digital,andthe latter's unitHitachi GST,from whom it derives most ofits business income.The companyalsoprovides automation equipment design, integration and maintenance services for manufacturers, public datashow.

The target'sexistingmanagementwill stay on after the deal, and its core management will become indirect shareholdersof Letong Chemical.The controlling shareholders and actual controllers will not change before and after the transaction, the announcementstated.

Letong Chemical also intends to raise matching fundsfromanon-publicshareofferingby soliciting up to10 eligible specificinvestorstofinancethe deal.The number of shares issuedis not expected toexceed 20 percent of the total share capital before the issue, and the total amount of funds raised will not exceed CNY950 million, the announcementadded.

Editor: Ben Armour