(Yicai Global) Aug. 31 -- Hundsun Technologies Inc. [SHA:600570], which is backed by Alibaba Group Holding Ltd. [NYSE:BABA] founder Jack Ma, said yesterday that it will acquire a 51-percent stake in a Hong Kong-based stock transaction services firm, Shanghai DZH Ltd. [SHA:601519] subsidiary DZH (HK) Investment Holding Co., for USD55.6 million (CNY367 million).
DZH (HK) Investment's wholly-owned subsidiary, Ayers Solutions Ltd., provides brokerages and futures companies in Hong Kong surrounding countries and regions with professional, reliable and innovative trading system and settlement system solutions, and it currently has more than 200 institutional clients, Hundsun said.
Hundsun said that the deal will expand its product lines of trading systems designed for small local brokerages, and increase its share of the local securities trading system market.
After the stake purchase, the target company will merge with Hundsun's Hong Kong subsidiary, Hundsun.com Co., raising Hundsun's shareholding to 54.70 percent, Hundsun said.
The price of the deal was determined through negotiations between the seller and buyer, and includes a 10.77-percent premium over the firm's valuation, Hundsun said.
Hundsun said it decided to pay a premium for the acquisition because the seller agreed to transfer a controlling stake in the target and the deal will create synergies that will allow Hundsun to lower business costs.
Zhejiang Rongxin Network Technology Co., in which Ma holds a 99.14-percent stake, grabbed a 100-percent stake in Hundsun Technologies parent Hangzhou Hundsun Electronic Group Co. in 2014. Ma became the largest shareholder of Hundsun Technologies with a 20.62-percent shareholding acquired via its parent company.
Hundsun Technologies is a financial software and network service supplier with businesses covering funds, securities, futures, banking, trusts, insurance and financial and asset management.