Tuesday, China Techfaith Wireless Communication Technology Ltd. (CNTF) announced the completion of its acquisition of 100% of QiGi Future Technology Co., Ltd. in an all-stock deal valued at US$12.0 million based on the closing price of TechFaith's ADSs on NASDAQ on July 28, 2009, which was US$2.40 per ADS. TechFaith has also agreed to provide a US$0.5 million working capital line.
Under the terms of the agreement, the number of ordinary shares issued will be adjusted if QiGi does not achieve a net income of over US$8.0 million for the fiscal year of 2010 and over US$10.0 million for the fiscal year of 2011, the company added.
Defu Dong, Chairman and Chief Executive Officer of TechFaith, commented, "We expect this transaction to contribute to our business going forward as we continue to build momentum. We expect this important acquisition will help in the efforts of our branding business to target enterprise users and operator tailored customers. We believe the branding business will lead to other business opportunities for TechFaith over the long term and we are very optimistic about the future of QiGi as a key TechFaith brand."
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