Dashan Education Holdings Limited (Stock Code: 9986) announced a supplemental agreement regarding its acquisition of a 52% interest in a target company. Key revisions to the original sale and purchase agreement include a lock-up undertaking for the consideration shares, performance targets linked to the target company’s profitability, and updated valuation details.
Under the revised lock-up arrangement, the vendors are restricted from transferring or creating encumbrances on 20% of the consideration shares until one month after the audit report for the year ending 31 December 2025, and on the remaining 80% until one month after the audit report for the year ending 31 December 2026. During these periods, the original share certificates of the blocked shares will be held in custody by Dashan Education.
The performance targets require the target company to avoid losses for both 2025 and 2026. In the event of a loss in either year, a formula-based compensation must be paid to Dashan Education in cash and cannot exceed the total consideration paid. If the vendors fail to pay the required compensation in full, Dashan Education has the right to repurchase or cancel the corresponding number of consideration shares at the original issue price. Any shortfall beyond share repurchases is payable in cash.
Dashan Education also provided updated valuation information. A market approach was adopted, using a price-to-sales ratio derived from comparable companies selected based on business similarity and active trading status. The concluded 100% equity value of the target company is approximately HK$206 million as at 31 May 2025, higher than the previously disclosed estimate of about HK$202.2 million. The target group, principally engaging in brand promotion and operation in the fields of beauty and health, recorded revenue of approximately RMB27.1 million for the six months ended 31 December 2024, and about RMB49.1 million for the five months ended 31 May 2025.
Dashan Education expects the acquisition to bring synergies through its established brand operation and management portfolios, active business relationships, and combined expertise. Upon completion, the target group will become subsidiaries of Dashan Education, enabling opportunities for wider corporate development, stronger fundraising capability, and the integration of expanded streamer and new media resources. The board of Dashan Education deems the transaction’s terms fair and beneficial to its shareholders.