Darbond Technology (688035.SH) plans to acquire 53% equity of Hengshuo Huawei to expand the variety of electronic packaging materials products.

Darbond Technology (688035.SH) announced that on September 20, 2024, the company signed a "Letter of Intent for Acquisition" with the existing shareholders of Hengsuo Huawei Electronics Co., Ltd. (referred to as "Hengsuo Huawei"), Zhejiang Yongli Industrial Group Co., Ltd. (referred to as "Yongli Industrial") and Hangzhou Shuhui Industrial Co., Ltd. (referred to as "Shuhui Industrial"). The company plans to acquire 53% equity in the target company through cash payment and obtain control of the target company. The preliminary pricing range for the 100% equity of the target company in this transaction is between 1.4 billion and 1.6 billion RMB. The final transaction price will be based on the valuation of the target company determined by an evaluation agency hired by the company in accordance with the Securities Law, and will be determined through negotiation by all parties and specified in the formal transaction agreement. Hengsuo Huawei is specialized in the research and industrialization of semiconductor and integrated circuit packaging materials. It is a national key high-tech enterprise, a base for the industrialization of achievements of the National 863 Program, a national-level new high-tech enterprise in specialties, and has a national post-doctoral research station and the Jiangsu Integrated Circuit Packaging Materials Engineering Technology Research Center. Hengsuo Huawei's main products are epoxy plastic packaging materials, with 12 production lines and over 100 models of products under the brands Hysol, KL, GR, MG, etc. The company's sales network covers major global markets and provides specialized products and services to well-known domestic and foreign semiconductor integrated equipment manufacturers and leading testing and packaging enterprises such as Infineon, Onsemi, Nexperia, China Resources Microelectronics, Huatian, TongFu Microelectronics, and Hangzhou Silan Microelectronics. According to PRISMARK statistics, in 2023, Hengsuo Huawei ranked third in global epoxy plastic packaging material companies in terms of sales volume, and fourth in terms of sales revenue. In the domestic market, it ranks first in sales revenue and sales volume among epoxy plastic packaging material companies, holding a certain leading position in the industry. This acquisition will help expand the company's range of electronic packaging materials, improve product solutions, and expand business areas, opening up new growth opportunities for the company. After the acquisition, the diversity of the company's product range and services will increase, achieving complementarity in product structure and accelerating the company's goal of becoming a comprehensive solution provider in the high-end electronic packaging materials field, thereby enhancing the company's overall market competitiveness. By integrating the resources advantages of both parties in markets, customers, technology, and products, synergies will be formed to promote the company's sustainable development. This move is in line with the company's overall development strategy.