SHENZHEN, China, April 3 /Xinhua-PRNewswire/ -- China Security &
Surveillance Technology, Inc. (OTC Bulletin Board: CSCT), a leading provider
of digital surveillance technology in the PRC, today announced that its wholly
owned subsidiary China Safetech Holdings Ltd., has completed the purchase of
Chain Star Investments Ltd., a Hong Kong corporation that is the holding
company of Shenzen Hongtianzhi Electronics Co., Ltd. ("Hongtianzhi").
Under the terms of the transaction, the Company paid a total consideration
of RMB 250 million (approximately USD$32.1 million) in exchange for 100%
ownership, consisting of RMB 125 million (approximately USD$16 million) in
cash and RMB 125 million (approximately USD$16 million) in the Company's
shares of common stock. The number of shares issuable in satisfaction of the
equity portion of the purchase price is 2,800,711 (based upon the average of
the closing price of the Company's common stock on the OTCBB for the 20
trading days prior to the date of the signing of the letter of intent on
October 2, 2006) which must be issued within 90 days following the signing of
the Equity Transfer Agreement. The price of the equity portion is subject to
achievement by Hongtianzhi of certain net income performance targets in 2007
and 2008. The minimum net income target for 2007 is between RMB25 million to
RMB 30 million (approximately USD$3.2 million to USD$3.9 million). The
minimum net income target for 2008 is between RMB35 million to RMB 40 million
(approximately USD$4.5 million to USD$5.1 million).
Shenzen Hongtianzhi Electronics Co. Ltd. is one of the top security
digital camera manufacturers in China and has been designated as a top 50
enterprise in the security industry by the China Security & Protection
Industry Association (CSPIA). In 2006, the Company achieved revenue and net
income thresholds of RMB $94 million (USD$12 million) and RMB $15 million
(USD$1.9 million), as well as net profit plus returned tax of RMB 20 million
(approximately USD$2.6 million), respectively.
Mr. Tu Guo Shen, Chief Executive Officer of China Security commented, "We
are pleased to complete our acquisition of Hongtianzhi. This addition
provides us with leading technology that will enhance our overall product
offering and allow us to become a more fully integrated provider of security
and surveillance services. We expect the inclusion of Hongtianzhi's state-of-
the-art camera systems will further enhance our product portfolio,
particularly as it relates to city-wide safety projects.
Additionally, we are pleased to welcome Hongtianzhi's employees to China
Security & Surveillance and believe the experience and quality of their
management team will provide us with additional capabilities to accelerate our
penetration of the rapidly growing security market. This announcement further
cements our leadership position in the security industry and we will continue
to look for opportunities to build our brand portfolio and expand our market
presence."
About China Security & Surveillance Technology, Inc.
Based in Shenzhen, China, China Security manufactures, distributes,
installs and maintains security and surveillance systems throughout the PRC.
China Security has a manufacturing facility in Shenzhen and a R&D facility
which maintains an exclusive collaboration agreement with Beijing University.
China Security has built a diversified customer base through its extensive
sales and service network throughout the PRC. To learn more about the Company
visit http://www.csstf.com.
Safe Harbor Statement
Statements during the conference presentation may include information
about the Company's plans, growth and strategies, which may include 'forward-
looking statements' within the context of the federal securities laws.
Statements regarding the Company's future events, developments and future
performance, as well as management's expectations, beliefs, plans, estimates
or projections relating to the future, are forward-looking statements within
the meaning of these laws. The Company's actual results may differ materially
from those suggested as a result of various factors. Interested parties should
refer to the disclosure concerning the operational and business concerns of
the Company set forth in the Company's filings with the Securities and
Exchange Commission.
