Luokung Technology Corp. Announces Acquisition of 51% of EMG and strategic investments from Geely Technology and Acuitas Capital
Luokung Technology Corp. (NASDAQ: LKCO) ("Luokung" or the "Company"), one of the global leading spatial-temporal big-data processing technology companies, a leading interactive location-based services company in China, today announced that Geely Technology Group Co. Ltd (hereinafter referred to as "Geely Technology") and Acuitas Capital, LLC (hereinafter referred to as "Acuitas") have made strategic investments in Luokung Technoloy Corp. through the purchase of preferred shares and common stock. The investment of USD $42.5 million from Geely prompt the Company to complete the acquisition of 51% of eMapgo Technologies (Beijing) Co., Ltd. (hereinafter referred to as the "EMG") (the "Acqusition"). As a result, the Company will immediately begin to consolidate the financial results of EMG, which will be reflected in the Company fourth quarter and year-end financial results. The Company anticipates receiving funding of up to $100 million from Acuitas to acquire the remaining equity of EMG. Thus, the Company expects to acquire the balance of EMG by the end of the year 2019.
EMG is one of the major map service providers in China accounting for about 24% of China in-dash navigation market share. EMG possesses the National Class-A qualification certificates of navigable Surveying and Mapping, and it is actively developing the autonomous driving and HD Map services. The completion of the Acquisition will enable the Company to have a map business with complete qualifications in China and enriched map of business data. Through the integration of with the Company's Superengine spatial-temporal big data engine and Superengine index cloud and other products and technical services, it will greatly improve the computing capability and operating efficiency of mapping data. Meanwhile, combined with the Company's remote sensing image data service, it can provide more comprehensive and precise services in smart city, IoT and Intelligent big data computing. Furthermore, the Acquisition enables the Company to expand its business into HD Map in connection to autonomous driving and intelligent transportation and other service areas, while enabling the Company to provide complete map data service in the location-based services business. The Company and EMG have begun to integrate on development and advancing new products, and the Company expects to announce major business progress in the near future.
The Acqusition of EMG provides the Company with the opportunity to develop its business model from technology service provider to an integrated AI spatial-temporal data service provider. With the advance technology and data source, there will be more comprehensive and diversified model in services and revenue for the Company.
Since the Company made announcement on August 28, 2019, the Company has begun to pay EMGs' shareholders in installments based on the acquisition agreement and the supplementary agreement. At the current stage, through cash payment and the payment of common stock and preferred stock, the Company shall obtain more than 51% of EMG's shares, and the Company expects to complete the 100% of the Acquisition of EMG before December 31, 2019.
The integration of both the Company and EMG result rapidly advancing in product development. Mr. Wang Zhigang, Chairman of EMG, stated "EMG is one of the earliest navigation electronic map companies in China. Under the circumstances that internet giants such as Baidu, Alibaba, Tencent are heavily involved in the competition of the industry, EMG can still walk independently as a neutral navigation electronic map service provider. To be one of the leading map service providers in China today, it proves that EMG must has its unique value and competitiveness."
"Luokung is a spatial-temporal big data company, has a large and efficient data processing and analysis techniques, and has a mass of end users, resources and ecological chain financing platform. I believe that the combination of the two will give EMG a strong momentum for further development, bringing EMG to a new level and breadth, on the one hand, improving the map service capabilities in the field of to Auto and to B, and on the other hand expanding the map service in the field of to C."
Mr. Xuesong Song, chairman and CEO Luokung, stated, "The acquisition of EMG marks a significant milestone for Luokung's development. As EMG will become one of the important cornerstones of the Company's intelligent spatial-temporal data service, greatly enhancing the breadth and extension of the company's spatial-temporal data business services. Our existing global leading spatial-temporal data processing technology and EMG data and technology integration will greatly improve and enrich the function and comprehensiveness of Luokung's product services and bring a huge increase in income scale. EMG will keep its independent brand and company operation and keep stand on its neutral status. EMG will also get full support in terms of technology, finance and marketing from Luokung.
Mr. Song continues to state: "Thanks to Geely Technology and Acuitas for their investments in the Company. Previously, Geely Technology Holdings and the equity participated in the intelligent transportation services in all aspects of railways and air, including "Caocao shuttle bus", "Star Ride Travel" that cooperation with Mercedes-Benz, "Volocopter unmanned electric air flight taxi", "Terrafugia flying car" and China Railway Gecent Technology Co., Ltd., which cooperated with the China State Railway Group Co., Ltd. and Tencent. The strategic investment of Geely Technology Holdings to Luokung will greatly enhance its active expansion of the space as well as its data services in the intelligent travel field. As the Company’s strategic and long-term value investors, Geely Technology and Acuitas will assist the Company by introducing other long-term value investors and international strategic partners. "
For more details on the transaction, please refer to the 6-K form submitted by the company to the US Securities and Exchange Commission today.