Automotive technology firm ECARX Holdings Inc (ECX) announced on Monday that it has agreed to buy the entire Flyme software business from DreamSmart Group for 1.8 billion yuan, or about $266 million in cash, to strengthen its proprietary software stack and end-to-end OS capabilities.
In pre market activity on the Nasdaq, shares of ECARX were up 3.77 percent, changing hands at $1.1000, after closing Thursday's regular session 6.19 percent lower.
The Flyme business comprises Flyme Auto OS and Flyme OS. Flyme Auto OS is already used in more than 2 million ECARX production vehicles across multiple automakers. Flyme OS is a mobile operating system used in vehicles, smartphones and wearables.
The company planned to fund the deal with about 70% bank loans from Chinese lenders with a 10-year maturity and 30% from internal sources and will pay 30% of the consideration within 30 days of signing and the rest within 30 days after the equity transfer closes.
ECARX is expected to inject 200 million yuan of working capital into the acquired entity after closing.
Upon completion, Flyme will operate as an independent software division under ECARX after the deal, preserving R&D teams and customer contracts and existing Flyme OS users will continue to receive updates, the company said in a statement.
The deal expands on a preliminary acquisition plan announced in April.
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