Guardforce AI (NASDAQ:GFAI) Co. Limited said it has signed a supplemental letter of intent (LOI) with Shenzhen Kewei Robot Technology Co. Limited to acquire an additional twelve robotics companies in China as it advances its goal of becoming the world’s leading provider of Robotics-as-a-Service (RaaS) solutions.
The deal, valued at US$12 million based on one-time projected average revenues for the twelve companies over the next five years, follows its previously announced definitive agreement to acquire seven robotics companies in China, the company said.
"We are effectively executing on our business strategy and look forward to tapping into the tremendous demand for contactless robotic services, which continues to accelerate as a result of the COVID-19 pandemic, new rules aimed at curbing the spread of infectious diseases, and a desire among customers to improve operating efficiency,” Terence Yap, chairman of Guardforce AI, said in a statement.
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“We look forward to building on our broad presence within China, as well as expanding our international footprint as we advance towards our goal to become a leading global provider of RaaS services," he added.
The twelve robotics companies, located in key economic areas across northeast, northwest, central and southwest China, are among the leading providers of RaaS solutions within their respective markets and bring established customers and management teams, Guardforce said.
Guardforce plans to finance the acquisition through a combination of cash (10%) and restricted ordinary shares of the company (90%) at the previously agreed price of US$2.00 per share, it said.
The acquisition is expected to close in the second half of 2022, subject to the execution of a definitive agreement, as well as customary due diligence and closing conditions.
"As a result of the COVID-19 pandemic and new rules implemented both in China and elsewhere, the demand for contactless solutions is increasing exponentially. These targeted twelve companies, combined with our previously announced acquisitions in China, provide us an established customer base, proven sales and management teams, as well as first-in-class capabilities,” said Lei Wang, CEO of Guardforce.
“Additionally, we look forward to leveraging our robots to support the growth of mobile digital advertising across a wide range of venues,” he said, adding that the company is targeting a slice of the projected US$176 billion digital ad spend in China by 2026.
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 jon.hopkins@proactiveinvestors.com