China 3C Group, a leading wholesale distributor and retailer of computers, communication products and consumer electronics in China, recently announced that the company has completed the acquisition of Jinhua Baofa Logistic, Ltd., a transportation logistics company in Eastern China.
The transaction was structured as an acquisition through the company’s subsidiaries, Zhejiang Yong Xin Digital Technology Co., Ltd. and Yiwu Yong Xin Communication Ltd., for a cash consideration of RMB 120 million (approximately US$17.4 million). With revenue of $10.5 million and net income of $1.9 million, Jinhua Baofa Logisticsâ€™ services cover more than 20 cities in Eastern China, including Shanghai, Hangzhou and Nanjing. Mr. Hongfei Guo, chief executive officer of Jinhua, will continue to manage the business following the closing of this acquisition.
Mr. Zhenggang Wang, chairman and chief executive officer of China 3C, commented, â€œWe are pleased to complete our acquisition of Jinhua and expand our logistical capabilities. We have combined Jinhua’s transportation network with our distribution network, which we believe will result in enhanced service and operating efficiency as we expand our operations into new geographic areas in China.â€ He continued, â€œJinhua’s gross margin is significantly higher than our other business segments, and we believe that Jinhua can contribute at least $10 million in revenue and $2 million in net income to our business annually.â€