The property company merger and acquisition drama continued to be on.
On March 4, Yida China (03639) issued a notice saying that it had sold all equity of Yida service in its property sector to Longhu property, with a transaction cost of 1.273 billion yuan.
After the transaction is completed, BDC will no longer hold any rights and interests of BDC services, and BDC services will no longer be a subsidiary of Yida China and will be separated from the comprehensive financial statements.
Source: Yida China announcement
According to the public data, Yida service was founded in 1996 and is a wholly-owned subsidiary of Yida China, mainly engaged in residential, commercial and industrial park property management services. As of December 31st, 2020, the total assets and net assets of Yida service are 393million yuan and 167million yuan respectively.
China has said that the novel coronavirus pneumonia will have a negative impact on the property sales business. The sale will enable the group to quickly recover funds and make up for the shortage of short-term liquidity through selling an auxiliary business line, and at the same time, establishing a cooperative relationship with the buyer. In addition, the net proceeds of the sale are intended to be used to repay group liabilities.
According to the latest data, the revenue of Yida service in 2020 is 481 million yuan, excluding the pre tax profit of 62million yuan, and the area of the pipeline is 16.636 million square meters. Longhu property has achieved 2.49 billion yuan in the first half of 2020, and it is expected to reach 6 billion yuan in the whole year, ranking in the forefront of the industry.
Longhu property also said that the acquisition of Yida service is win-win cooperation, in line with the layout of Longhu property City, and both sides can form organic complementary services products to achieve long-term benign development.
It is worth mentioning that, in the acquisition, Yida service has made performance commitment to Longhu property. As of December 31st, 2024, the book net profit of Yida service and its subsidiaries will not be less than RMB 71.47 million. If the performance commitment cannot be completed during the period, the liquidated damages for the service of Yida reach 14.24 times the difference.
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Reprint indicated source：Spark Global Limited information