BEIJING - Hollysys Automation (NASDAQ:HOLI) Technologies Ltd. (NASDAQ: HOLI), a prominent provider of automation control system solutions, is nearing the completion of its merger transaction after receiving all required approvals from the People's Republic of China. The buyer, controlled by private equity firm Ascendent Capital Partners, has fulfilled the necessary regulatory conditions to proceed with the merger.
The closure of the transaction is contingent on meeting all closing conditions outlined in the merger agreement. These include ensuring that Hollysys and its subsidiaries maintain a specified aggregate amount of net cash and cash deposits in certain subsidiary accounts.
Hollysys anticipates no issues in satisfying these financial conditions. Moreover, the buyer must waive a condition regarding the dissent of shareholders holding not more than 10% of the company's total issued and outstanding ordinary shares.
Upon completion of the merger, Hollysys' ordinary shares will be delisted from the NASDAQ Global Select Market. Both Hollysys and Ascendent are working diligently to finalize the transaction promptly.
Founded in 1993, Hollysys has established a significant presence in the industrial automation and rail transportation sectors, with operations extending across China and eight other countries and regions in Asia.
The company's integrated solutions encompass a wide range of hardware, software, and services that enhance operational safety, reliability, efficiency, and intelligence for its customers. Hollysys has a strong track record, with over 45,000 projects for approximately 23,000 customers in industries such as power, petrochemical, and rail transportation, as of June 30, 2023.
Ascendent Capital Partners, based in Hong Kong, manages assets for a global clientele, including sovereign wealth funds and pension funds. The firm is known for its strategic private equity investments and advisory services, fostering growth for portfolio companies and delivering robust risk-adjusted returns for investors.
This news is based on a press release statement and contains forward-looking statements subject to risks and uncertainties. Hollysys' future financial and operational performance may differ from current expectations due to various factors.
In other recent news, Hollysys Automation Technologies Ltd. has undergone significant changes. The company appointed Vocation HK CPA Limited as its new independent registered public accounting firm following the resignation of Union Power HK CPA Limited.
This transition was approved after a thorough evaluation process by Hollysys' board and audit committee. Notably, there were no disputes over accounting practices or auditing procedures leading to Union Power's resignation.
In more developments, Hollysys is actively working towards finalizing a merger agreement with a buyer entity under Ascendent Capital Partners. The CEO of Hollysys, Dr. Changli Wang, recently sold a portion of his company shares for personal financial planning, however, he retains approximately 80% of his initial holdings. It has been stated that this sale will not impact the ongoing privatization process or the company's operational plans.
These are recent developments and reflect the company's current expectations and projections about future events. However, actual future results may differ due to various risks and uncertainties.
InvestingPro Insights
As Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) progresses towards the completion of its merger, there are several financial metrics and market indicators that provide a deeper understanding of the company's current position.
According to InvestingPro, Hollysys holds more cash than debt on its balance sheet, which aligns with the company's confidence in meeting the net cash conditions of the merger agreement. Moreover, the company's stock has experienced a significant return over the last week, with a 17.66% price total return, reflecting positive market sentiment as the merger approaches its final stages.
InvestingPro Data further highlights Hollysys' valuation and performance metrics. The company's adjusted market capitalization stands at $1.58 billion USD, and it trades at an earnings multiple (P/E Ratio) of 20.88, which is considered low, suggesting that the stock could be undervalized relative to its earnings.
Hollysys' revenue for the last twelve months as of Q3 2024 is reported at $792.05 million USD, showing a growth of 3.6%, which indicates a steady increase in the company's top-line performance.
For investors looking to delve deeper into Hollysys' financials and market performance, there are additional InvestingPro Tips available. For example, analysts predict the company will be profitable this year, and cash flows can sufficiently cover interest payments, which are key factors for assessing the company's financial health post-merger. There are 11 more tips available on InvestingPro, providing insights into aspects such as the company's liquidity, dividend policies, and stock valuation.
Interested readers can explore these tips and more by using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering a comprehensive analysis tool for informed investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.