Branding China Group Ltd (SEHK:8219) signed a memorandum of understanding to acquire Grand Rapids Mobile International Holdings Ltd from Huang Wei for approximately HKD 200 million on March 21, 2013. Branding China Group Ltd (SEHK:8219) signed a definitive agreement to acquire Grand Rapids Mobile International Holdings Ltd from Huang Wei on April 19, 2013. Under the terms of the agreement, Branding China Group will pay HKD 27.84 million in cash after completion and within three business days after the conditions precedent for the payment of the consideration having been satisfied and issue 46.81 million shares of Branding China, within 14 business days after the relevant audited financial statements consent date, if the consolidated net profit for the year ended December 31, 2013 of Grand Rapids Mobile International Holdings is not less than the relevant warranted profit, Branding China Group shall pay HKD 13.92 million in cash to Huang Wei and within 14 business days after the relevant audited financial statements consent date, if the consolidated net profit for the year ended December 31, 2014 of Grand Rapids Mobile International is not less than the relevant warranted profit, Branding China Group shall pay HKD 13.92 million in cash to Huang Wei.

The consideration was arrived at after arm's length negotiations between the parties. The cash portion of the consideration will be financed using the internal resources of Branding China Group. Pursuant to the transaction, Grand Rapids Mobile International will become a wholly-owned subsidiary of Branding China Group. For the year ending December 31, 2012, Grand Rapids Mobile International reported turnover of CNY 66.76 million (HKD 81.93 million), net profit before tax of CNY 15.53 million (HKD 19.06 million), net profit after tax of CNY 11.61 million (HKD 14.25 million), total assets of CNY 56.83 million (HKD 69.74 million) and net assets of CNY 11.85 million (HKD 14.54 million).

The transaction is subject to Branding China Group being satisfied with the results of due diligence investigation, all necessary and appropriate approvals, authorizations, consents having been obtained in respect of the agreement from the government, and other regulatory authorities, approvals from the Listing Committee of the Stock Exchange for the listing of the consideration shares, approval from the shareholders of Branding China Group, obtaining of a legal opinion from the lawyers confirming that the conditions precedent have been satisfied and that the warranties given by the Huang Wei remain true and accurate in all respects. If all the conditions to the transaction have not been satisfied on or before June 14, 2013, or such other date as the parties may agree, the agreement shall lapse.

The transaction shall be completed on the third business day after all the conditions precedent have been satisfied or waived. The Directors of Branding China Group consider the terms of the agreement are on normal commercial terms and are fair and reasonable and the acquisition is in the interests of Branding China and the shareholders as a whole.

As on May 16, 2013, Branding China Group Ltd announced that a shareholders meeting is scheduled for June 5, 2013 to consider and approve the transaction. As on June 5, 2013, the shareholders of Branding China Group Ltd approved the transaction.

Anglo Chinese Corporate Finance Limited acted as financial advisor to Branding China Group in the transaction. The currency conversions were made through www.oanda.com on December 31, 2012.