Nanjing-based leisure and travel agency, China United Travel Co. Ltd. (CUTC), is planning to acquire a 100% stake in the sports company Duo Sport Group via cash and shares, according to an official statement released on Monday evening.
This deal is said to be valued at 495.0 million yuan (US$75.89 million). Reuters said that the travel agency has plans to “raise up to 209.7 million yuan in shares private placement to fund acquisition”.
At the same time, the CUTC will sell all shares of its subsidiary, Tangshan Hot Spring, for 299 million yuan. In the year 2016, the hot spring unit generated 69.2 million yuan, accounting for 63% of its parent company’s total revenue, while its parent company decided to cut the hot spring business due to recurring losses during the past 3 years.
The acquisition will become a milestone for the CUTC to enter the sports industry. As it buys Duo Sports, a company who focuses on sporting events operation and sports agencies, the travel company plans to monetize its new sports business through copyright trading, sports marketing and consulting services.
Proofread by William Logsdon