Tencent has entered into an agreement to pick up a 5 per cent stake in Shanghai-listed office automation solutions provider Weaver Network for over 771 million yuan ($110 million).
The deal comes at a time when the COVID-19 outbreak has further accelerated the adoption of intelligent office solutions in China.
Shenzhen-based Tencent will purchase 10.6 million ordinary shares, or a 5 per cent stake, in Weaver Network at a price of about 72.7 yuan ($10.4) apiece through Tencent Industrial Investment Fund, Weaver Network disclosed in a filing with the Shanghai Stock Exchange (SSE) on July 27.
Tencent will become the largest institutional shareholder of Weaver Network after the transaction.
The filing indicates that Tencent already signed the agreement on July 24 with the seller, Wei Jinkun, a shareholder of Weaver Network and the father of the company founder and chairman, Wei Lidong.
Wei Jinkun and Wei Lidong currently hold an aggregate of nearly 121.8 million ordinary shares, or a 57.36 per cent stake, in Weaver Network. After the transaction, their shares will be diluted to 52.36 per cent, at about 111.2 million ordinary shares.
Established in 2011, Shanghai-based Weaver Network provides office automation solutions and collaborative management software to help enterprises improve work efficiency.
The company delivers products and solutions to clients in a wide range of industries, including manufacturing, real estate, financial, healthcare, tourism, and transportation.
Some of its corporate clients include Hong Kong-listed retail pharmacy firm Shanghai Pharma, Chinese conglomerate Fosun Group, real estate developer Greenland Group, and Beijing-based insurer PICC, per the company website.
Weaver Network raised 248 million yuan ($35 million) in an initial public offering (IPO) in Shanghai in January 2017. Its shares are listed under the symbol “603039.”
The company booked 201 million yuan ($29 million) in revenue in the first quarter of 2020, down 1.98 per cent compared to the same period in 2019. Its net profit attributable to shareholders decreased by 2.22 per cent to about 19 million yuan ($3 million) during the period, according to its latest financial report.
Originally published by Deal Street Asia