China Digital Enters Chinese 3G Communications Market with Acquisition of Galaxy View International
30 Juni 2006 - 3:53PM
PR Newswire (US)
Company Says $8M Acquisition Accretive in 2006 LOS ANGELES and
SHENZHEN, China, June 30 /PRNewswire-FirstCall/ -- China Digital
Communication Group (OTC:CHID) (BULLETIN BOARD: CHID) , one of the
fastest growing battery components manufacturers in China,
announced today that it has completed the acquisition of Galaxy
View International, Ltd., which operates through its wholly owned
subsidiary Sono Digital Electronic Technologies Co., Ltd., a
leading supplier of third-generation (3G) communications technology
and equipment in China, in a cash and stock transaction valued at
approximately $8 million. In 2005, Galaxy View had unaudited
revenues of $6 million and unaudited net income of $2 million.
China Digital acquired all of the outstanding shares of privately
held Galaxy View for $3 million in cash and 7,575,757 unregistered
shares of China Digital preferred stock valued at approximately $5
million. China Digital CEO Ran Liang, said, "The acquisition of
Galaxy View and its wholly owned subsidiary, Sono Digital,
positions us to become a competitor in the new rapidly evolving 3G
technology communications industry. China is active in the
worldwide technological shift to 3G technologies, which allows for
data transmission, e-mail and instant messaging. We believe that
the acquisition will positively impact our 2006 financial
performance. For China Digital, this marks the beginning of a
strategic transformation to become a manufacturer of high-tech
products and technologies to 3G communication systems wireless
providers." Under the terms of the acquisition agreement, Galaxy
View shareholders agreed to a lock-up provision restricting the
resale of their shares for a five-year period. Each preferred share
entitles the holder to seven votes per share on all matters to be
voted on by the shareholders and will be mandatorily convertible
into one share of common stock after five years. According to U.S.
GAAP rules, China Digital will report revenue and net income from
Galaxy View commencing upon the closing date of the acquisition.
Estimated diluted EPS, assuming that the Galaxy View acquisition
closes at the beginning of July 2006, is projected to be $0.09.
China Digital estimates revenues at $19.3 million and net income at
$5.8 million. Assuming that the acquisition had taken place at the
beginning of the year at January 1, 2006, the pro forma diluted EPS
is projected at $0.11, revenues at $21.9 million and net income at
$6.9 million for the year ended December 31, 2006. The company
emphasizes that the foregoing statements regarding projections for
2006 are forward-looking, and actual results may differ materially.
These are the company's targets, not predictions of actual
performance. About Galaxy View International, Ltd. Galaxy View
International, Ltd., which operates through its wholly owned
subsidiary Sono Digital Electronic Technologies Co., Ltd., is a
high-tech enterprise specializing in the mobile communication
equipment industry. The company has a broad range of services,
including mobile equipment production, technical development,
product standardization, market research, equipment setup and
debugging, technical support, implementation analysis and searching
for merger opportunities. The company embraces a set of highly
effective and standardized systems in management, production, and
quality control. It is recognized by the Science and Technology
department of Shenzhen as a "high-tech, software enterprise." The
company has intellectual property rights in software development
and production. Sono is known throughout its industry as one of the
most competitive communication equipment producers. For more
information on Sono, visit http://www.sono.com.cn/. About China
Digital Communication Group China Digital Communication Group,
through its wholly owned subsidiary, Shenzhen E'Jenie Science and
Technology Co., Ltd. (E'Jenie), is one of China's leading
manufacturers and developers of advanced telecommunications
equipment. E'Jenie sells advanced high-quality lithium-ion battery
shell and cap products to all major lithium-ion battery cell
manufacturers in China. E'Jenie's products are used to power mobile
phones, MP3 players, laptops, digital cameras, PDAs, camera
recorders and other consumer electronic digital devices. China
Digital Communication Group is continuing its expansion across East
Asia, while seeking distribution partners and acquisitions in new
global markets, including the United States. For more information,
visit http://www.chinadigitalgroup.com/ or contact Roy Teng of
China Digital, (310) 461-1322, e-mail: . An investment profile on
China Digital Communication Group may be found at
http://www.hawkassociates.com/chinadigital/profile.php. For
investor relations information regarding China Digital
Communication Group, contact Frank Hawkins or Ken AuYeung, Hawk
Associates, at (305) 451-1888, e-mail: . An online investor kit
including press releases, current price quotes, stock charts and
other valuable information for investors may be found at
http://www.hawkassociates.com/ and
http://www.americanmicrocaps.com/. Forward-looking statement:
Except for the historical information, the matters discussed in
this news release may contain forward-looking statements,
including, but not limited to, factors relating to future sales.
These forward-looking statements may involve a number of risks and
uncertainties. Actual results may differ materially based on a
number of factors, including, but not limited to, uncertainties in
product demand, risks related to doing business in China, the
impact of competitive products and pricing, changing economic
conditions around the world, release and sales of new products and
other risk factors detailed in the company's most recent annual
report and other filings with the Securities and Exchange
Commission. DATASOURCE: China Digital Communication Group CONTACT:
Investor Relations: Frank Hawkins or Ken AuYeung, both of Hawk
Associates, +1-305-451-1888, ; or Roy Teng of China Digital,
+1-310- 461-1322, Web site: http://www.chinadigitalgroup.com/
http://www.sono.com.cn/
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