Strategic Acquisition Creates New Growth Opportunities in Southern China's Market
Acquisition to Complement the Company's Core Solar Water Heater Business Strategy
LOS ANGELES and BEIJING, Jan. 16 /Xinhua-PRNewswire-FirstCall/ -- China Solar & Clean Energy Solutions, Inc. (f/k/a Deli Solar (USA), Inc.)
(OTC Bulletin Board: CSOL) (the "Company"), a premier manufacturer and distributor of solar water heaters, space heating devices and renewable energy solutions in the People's Republic of China (the "PRC"), today announced that it has entered into a definitive agreement to acquire Shenzhen PengSangPu Solar Industrial Products Corporation ("Shenzhen PengSangPu"). The acquisition of Shenzhen PengSangPu will enable China Solar to immediately begin leveraging its technology and engineering capabilities and expertise, and will significantly expand China Solar's customer base and presents a commercial and industrial market opportunity for solar water heaters in southern China.
Under the terms of the agreement, China Solar's subsidiary, Beijing Deli Solar Technology Development Co., Ltd., will acquire 100% of the equity interest of Shenzhen PengSangPu Solar Industrial Products Corporation including its net assets and trademarks for approximately $2.8 million in China Solar common stock plus the audited net asset value of PengSangPu in cash. The cash paid to the owners of PengSangPu will be re-deposited into the Company as a shareholder loan for working capital. Fifty percent of the loan will be repaid after one year and the rest will be repaid after the second year by the Company.
For the first nine months of 2007, Shenzhen PengSangPu's revenue was $7.7 million and net income was $0.7 million. Under the terms of the agreement, if Shenzhen PengSangPu's sales revenue is less than $13.6 million, with an
after-tax net profit less than $1.3 million for the year ended December 31, 2008; or if in the year ended December 31, 2009, it doesn't reach the targeted sales revenue of $19.8 million or the after-tax net profit of $1.7 million, Shenzhen PengSangPu will pay the difference between the actual revenue and the targeted revenue of the year by reducing the amount payable on the shareholders' cash loan. If the shareholders' loan is not sufficient to pay the difference, the common shares held by the Shenzhen PengSangPu owners will be returned to China Solar to the extent necessary for the remaining balance owed.
Shenzhen PengSangPu was formed in 1993 in Shenzhen, China. It specializes in manufacturing and selling flat plate solar water heaters, and installation and engineering of central solar hot water systems for business users including schools, hotels, hospitals, and factories. Shenzhen PengSangPu holds 7 patents and a very strong brand name in China. Its annual production capacity of flat plate solar power collector is 400,000 square meters which are sold in China, the EU, and North America. The Company is ISO9001 certified and AAA+ standard company authorized by Institute of Chinese Product Quality Association.
"We are very excited to announce the acquisition of Shenzhen PengSangPu, an important milestone in complementing our core business strategy of becoming a fully integrated clean technology and renewable energy solutions provider," said Mr. Deli Du, Chief Executive Officer of China Solar. "The acquisition of Shenzhen PengSangPu extends our strategic footprint and opens new markets in Southern China where local government strongly support using solar water heaters in residential buildings. This transaction brings us additional proprietary products and complements our Clean Technology Energy product portfolio."
"In addition, Shenzhen PengSangPu offers a variety of experience in installing and engineering central solar water heater system. We are delighted that PengSangPu's senior management and its over 200 engineers and technicians will be joining our Company. By integrating their proprietary technologies and engineering expertise, we expect to both improve our competitive advantage and overall profit margins. The acquisition is expected to be accretive to China Solar's 2008 earnings," Mr. Du concluded.
About China Solar & Clean Energy Solutions, Inc.
China Solar & Clean Energy Solutions, Inc. operates through its wholly owned subsidiaries Bazhou Deli Solar Heating Energy Co. Ltd., Beijing Deli Solar Technology Development Co., Ltd. and its 51% ownership in Tianjin Huaneng Energy Equipment Company, all of which are located in the PRC. The Company manufactures and distributes hot water and space heating devices to customers in the PRC, in addition to waste heat recovery systems. For more information, please visit http://www.cn-cse.com .
Safe Harbor Statement:
Certain statements in this news release may contain forward-looking information about China Solar & Clean Energy Solutions, Inc. and its subsidiaries' business and products within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. The actual results may differ materially depending on a number of risk factors including, but not limited to, the general economic and business conditions in the PRC, market and customer acceptance and demand for products, ability to market products, fluctuations in foreign currency markets, the use of estimates in the preparation of financial statements, the impact of competitive products and pricing, the ability to develop and launch new products on a timely basis, the regulatory environment, fluctuations in operating results, and various other factors beyond its control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in the Company's reports filed with the Securities and Exchange Commission. China Solar & Clean Energy Solutions, Inc. undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact:
Gary Lam
China Solar & Clean Energy Solutions, Inc.
Tel: +86-10-6385-0516
Email: garylam8899@gmail.com
Feng Peng
HC International, Inc.
Tel: +1-917-558-7610
Email: Feng.peng@hcinternational.net
