Our Client
Project Influence is engaged in helping non-China brands sell within China. Its core business includes adopting AI to develop a great marketing and eCommerce solution for its clients. It has many years of in-market experience and provides services to over 550 brands across mainland China, Hong Kong and USA.
The Challenge
Project Influence has solicited acquisition interest from a listed company, but the organisational structure is scattered with various individuals holding various entities in mainland China, Hong Kong and USA. Project Influence requires a re-organization of these entities under one holding company to enable shareholders to be able to sell the group, efficiently manage its entities, and have a consolidated view of its financial results.
Since Project Influence is in the media industry in China, the re-organisation plan needs to consider the Internet Content Provider (ICP) license being held under a Chinese local company.
Our Solution
- Prepared a set of management accounts that met the auditor’s requirement, and worked with the auditors to carry out audit procedures and issue an auditor’s report
- Conducted analysis on different scenarios of re-organisation and quantified tax and other potential financial exposure to shareholders
- Liaised with external tax advisor of impact on subsequent dividend pay-out, capital gain on disposal of shares and transfer pricing arrangement
- Liaised with external legal advisor on reviewing terms on documents for share transfer
- Liaised with external appraiser on valuation of company to be acquired by the holding company and review valuation model applied
- Executed the restructuring in China, Hong Kong and USA
Result
Project Influence has re-organised into a structure that is compliant to local laws, and is ready to be acquired. It’s financial information compliant is also prepared to be compliant to international standards.
As such, Project Influence has received a term sheet from the listed company potential buyer with the consideration of more than 2 times of the valuation before the re-organisation (from ~USD30m to ~USD80m).
