Guardforce AI (NASDAQ:GFAI) said it has entered into two definitive agreements to acquire a total of eight companies in China as it accelerates the commercial rollout of its Robotics-as-a-Service (RaaS) business initiatives and expands its integrated security capabilities.
“China represents a significant growth opportunity, as it is among the largest and fastest-growing economies in the world," the company’s CEO Lei Wang said in a statement. "Importantly, these acquisitions bring established management and sales teams with proven track records in their local markets."
Guardforce AI said the first agreement is to acquire Beijing Wanjia Security System Limited, an integrated security provider with 25 years of experience from Shenzhen Yeantec Co, Limited for approximately US$8.4 million. The acquisition is expected to close in June 2022, subject to customary closing conditions, it added.
The second agreement is to acquire an additional seven companies from Shenzhen Kewei Robot Technology Co., Limited, valued at approximately US$21.6 million, with the acquisition expected to close in the third quarter of 2022, the company said.
The seven companies being acquired in the second agreement include:
- Beijing Keweian Robot Technology Limited, based in Beijing
- Shanghai Nanxiao Kewei Intelligent Technology Limited, based in Shanghai
- Tianjin Kewei Robot Technology Limited, based in Tianjin
- Chongqing Kewei Robot Technology Limited, based in Chongqing
- Guangxi Kewei Robot Technology Limited, based in Nanning, Guangxi Province
- Fuzhou Kewei Robot Technology Limited, based in Fuzhou, Fujian Province
- Hainan Kewei Robot Technology Limited, based in Haikou, Hainan Province
Guardforce AI noted that the seven companies to be acquired from Kewei are established providers of RaaS solutions in their respective markets in China. During the past several years, these companies have expanded their customer base across various industries, such as hospitality, healthcare, education, malls, and property management, it said.
The company said the total deal value of both acquisitions of US$30 million is based on one-time projected average revenues for the eight companies over the next five years. The deal will be paid in a combination of cash (10%) and restricted ordinary shares of the company (90%) at the previously agreed price of US$2.00 per share.
"These acquisitions are expected to be truly transformative, as they not only strengthen our foothold in major cities and regions across China but also provide us new capabilities and a diverse customer base across a wide range of industries,” Guardforce AI chairman Terence Yap said in a statement. “We look forward to leveraging these newly acquired capabilities across our global platform and we expect to benefit from meaningful economies of scale."
Guardforce AI is a global integrated security solutions provider focused on developing robotic solutions and information security services that complement its well-established secured logistics business.
Contact the author at stephen.gunnion@proactiveinvestors.com