BEIJING - Hollysys Automation (NASDAQ:HOLI) Technologies Ltd. (NASDAQ: HOLI), a prominent provider of automation control system solutions, and private equity firm Ascendent Capital Partners announced today the completion of their merger.
Following the agreement reached on December 11, 2023, Hollysys is now a wholly owned subsidiary of Superior Technologies Holding Limited, the parent company formed by Ascendent for this transaction.
The merger has resulted in Hollysys's withdrawal from the public market, with the company requesting a suspension of trading of its shares on the Nasdaq Global Select Market as of the end of today's trading session. Shareholders of Hollysys will receive $26.5 per share in cash, with certain exceptions as detailed in the merger agreement.
Leon Meng, Chairman of Ascendent, expressed enthusiasm for the acquisition and the future collaboration with Hollysys's management and employees. Dr. Kok Peng Teh, Chairman of Hollysys's Special Committee of the Board of Directors, also remarked on the value delivered to shareholders through the merger, which he believes is the best path forward for the company's stakeholders.
Shareholders who held shares immediately before the merger will be contacted with instructions on how to surrender their shares and receive the merger consideration. The company has also initiated the process to delist from Nasdaq and deregister its securities, which will become effective 90 days after the filing of the required Form 25 with the SEC.
Hollysys, founded in 1993, has established itself in the automation control systems sector, with notable projects in industries such as power, petrochemical, and rail transportation. Ascendent Capital Partners, headquartered in Hong Kong, manages assets for a variety of global institutional investors and has a history of successful private equity investments.
The advisors for the deal included Deutsche Bank AG (NYSE:DB) and BNP Paribas (OTC:BNPQY) Securities Corp, among others, providing financial and legal counsel to Hollysys and Ascendent respectively.
This merger represents a significant shift for Hollysys as it transitions from a publicly traded company to a private entity, with the anticipation of continued growth and development under the new ownership structure. The information regarding the merger is based on a press release statement issued by Hollysys.
In other recent news, Hollysys Automation Technologies Ltd. has made significant changes in its management and operations. The company has appointed Vocation HK CPA Limited as its new independent registered public accounting firm, following the resignation of Union Power HK CPA Limited due to health reasons of the managing partner.
The transition was smoothly executed after a thorough evaluation by Hollysys' board and audit committee, with no disputes over accounting practices or auditing procedures involved in the resignation.
Further, Hollysys has reaffirmed its commitment towards a merger agreement with Ascendent Capital Partners. Both entities are diligently working to meet the necessary conditions to finalize this merger. In another development, despite selling a portion of his company shares for personal financial planning, CEO Dr.
Changli Wang continues to hold approximately 80% of his initial holdings. He has expressed no plans to sell additional shares prior to the completion of the company's privatization process with Ascendent Capital Partners.
These recent developments highlight the ongoing changes within Hollysys, with a focus on maintaining the company's stability and operational plans amidst these transitions.
InvestingPro Insights
As Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) transitions into a private entity following its merger with Ascendent Capital Partners, it's worth noting several key metrics and insights from InvestingPro that highlight the financial health and market performance of the company leading up to this strategic move.
InvestingPro Data shows that Hollysys holds a market capitalization of approximately $1.64 billion USD, with a Price/Earnings (P/E) ratio of 21.66. This P/E ratio is fairly consistent with the adjusted P/E ratio for the last twelve months as of Q3 2024, which stands at 21.78. Additionally, the company has demonstrated a stable revenue growth of 3.6% during the same period, underscoring its consistent performance in the automation control systems sector.
In terms of profitability, Hollysys has been able to maintain a Gross Profit Margin of 31.07%, which is a testament to its operational efficiency. Furthermore, InvestingPro Tips indicate that Hollysys has more cash than debt on its balance sheet, suggesting a strong financial position. This is a critical factor for shareholders to consider, as it implies the company's ability to sustain operations and invest in future growth without the immediate pressure of debt repayment.
Moreover, the company's stock has been trading near its 52-week high, with a price percentage of 96.92% of that high, and has seen a significant return over the last year, with a 51.17% increase in price total return. This performance could have influenced the merger consideration and the final offer price to shareholders.
For those interested in deeper analysis and additional insights, InvestingPro offers more tips on Hollysys, including the company's earnings multiples and liquidity position. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription to access these valuable insights. There are 11 additional InvestingPro Tips available, which could be particularly useful for investors seeking to understand the full picture of Hollysys's financial health and market potential prior to its departure from the public market.
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