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China's TuanChe to acquire cloud software developer Longye

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China's TuanChe to acquire cloud software developer Longye

Chinese automotive marketplace TuanChe Ltd. agreed to purchase cloud software developer Longye International Ltd. for 200 million Chinese yuan (US$28.9 million) in a cash-and-stock transaction.

TuanChe will finance half the deal using a bridge loan of a U.S. dollar equivalent of 100 million yuan. The remaining half will be paid by issuing 8,366,444 Class A ordinary shares to Longye's selling shareholders at a price determined by dividing a U.S. dollar equivalent of 100 million yuan by the average closing price of TuanChe's shares over a 30-day period until May 10. Such shares will be bound by contractual restrictions on transfer.

The acquisition is expected to help improve TuanChe's operations, product offerings, and sales and marketing capabilities. It is subject to pre-acquisition corporate restructuring, corporate approvals and other customary closing conditions.

Longye develops and provides cloud-based social customer relationship management systems for China's automotive industry, including software-as-a-service platform Cheshangtong.

TuanChe floated its shares in a U.S. listing in 2018.

As of May 31, US$1 was equivalent to 6.90 Chinese yuan.