China Automotive Systems, Inc., a power steering components and systems supplier, announced that it has entered into an agreement to acquire a 51.0% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd.
Fujian Qiaolong was founded in 1993 and currently produces special emergency and civil service vehicles. Its 200-strong workforce has the production capacity to modify approximately 4,000 special services vehicles annually.
For the 2013 year, Fujian Qiaolong had revenues of approximately RMB 41.6 million with net earnings of about RMB 6.5 million. Registered capital is approximately RMB 20 million with assets totaling RMB 67.5 million as of the end of 2013. The total purchase price is approximately US$3.0 million in cash. Upon completion of the acquisition, CAAS will further provide a loan of RMB 30.0 million (US$4.8 million) to Fujian Qiaolong at an annual interest rate of 8.5% to further its expansion.
“Special service vehicles are a growing segment within the commercial vehicle market, as China continues to move towards greater urbanization,” commented Hanlin Chen, chairman of China Automotive Systems. “Being the largest power steering producer in China, we have developed relationships with many OEMs and components suppliers over the last two decades. In the past few years, we began researching acquisition opportunities. We were impressed with Qiaolong’s product offerings and ongoing strong growth prospects. We look forward to developing new growth opportunities as we expand our operations and create greater value for our shareholders.”