Zoom Technologies Announces Sale of China-Based Operations and Strategy to
Acquire U.S.-Based Businesses
BEIJING, Jan. 7, 2013 (GLOBE NEWSWIRE) -- Zoom Technologies, Inc.
(Nasdaq:ZOOM) a leading designer and manufacturer of mobile phones and
consumer electronics, announced the execution of a definitive agreement
pursuant to which it will sell its China-based manufacturing, sales and
marketing, and R&D subsidiaries, and that the proceeds of the sale will be
used for the purchase of additional U.S.-based businesses.
On December 31, 2012, Zoom Technologies, Inc. ("Zoom" or the "Company")
entered into a Share Purchase Agreement with the Beijing Zhumu Culture
Communication Company, Ltd. (the "Purchaser"), a PRC company that provides
services to the telecommunication industry, for the sale to the Purchaser of
the Company's China based operations including: 100% ownership of Beijing
Nollec Wireless Company ("Nollec") – the R&D subsidiary, 80% ownership of
Tianjin Tongguang Group Digital Communication Company, Ltd. ("TCBD") – the
main manufacturing entity, 100% ownership of Profit Harvest Corporation, Ltd.
("Profit Harvest") – the sales & marketing company, and 100% ownership of
Celestial Digital Entertainment, Ltd. ("CDE") – the mobile game maker. As
consideration for the sale, the Purchaser shall pay the Company an aggregate
of Rmb 200 million, equivalent to approximately US$32 million. The purchase
price is, subject to adjustment pending an appraisal by an independent third
party appraiser. As of the date of the Share Purchase Agreement, the Purchaser
has deposited the full amount of RMB 200 million into an escrow account, to be
released to the Company upon the final closing of the Sale, which will be held
30 days after the Company receives all the requisites corporate and regulatory
approvals with respect to the Sale.
The Company's ownership interest in SpreadZoom Technologies Co., Ltd., which
owns and operates mobile phone manufacturing facilities in Tianjin and which
is a joint-venture between the Company and Spreadtrum Technologies, Inc., is
not part of the sale.
The final closing of the sale of the above-mentioned subsidiaries of the
Company is anticipated to take place within the first quarter of 2013 with the
exception of Profit Harvest which closing occurred as of December 31, 2012. In
addition, the Company will, through Portables Unlimited, LLC, its U.S. based
subsidiary, continue to operate the exclusive wholesale distributor business
for T-Mobile products and services in the United States.
The Company intends to use the cash proceeds from the sale of the assets to
acquire similar businesses in the U.S. to further expand its activities there,
including but not limited to the acquisition of additional licensed retail
stores that service T-Mobile USA.
Zoom's Chairman & CEO, Mr. Leo Gu stated, "Our strategy is a simple one.We
will focus our resources to capture revenues from U.S. based operations, which
we started over a year ago by our acquisition of Portables Unlimited in New
York.With this sale, our revenues will be predominantly generated from our
U.S. operations.The selling of our China based operations doesn't mean that
we are out of touch with China because we can always contract with our former
subsidiaries, when the need arises going forward.We feel that it is important
to listen to the market which has not been favorable Chinese companies listed
in the U.S., and we are confident that the combination of our continued
relationships in China and the expansion of our U.S. activities is a positive
direction for Zoom Technologies.We are actively seeking synergistical
businesses to bring into Zoom and adding on more licensed retail stores of
T-Mobile USA is a part of this plan."
About Zoom Technologies, Inc.
Zoom Technologies is a holding Company with subsidiaries that engage in the
manufacturing, research and development, and sale of electronic and
telecommunication products for the latest generation of mobile phones,
wireless communication circuitry and related software products. Zoom
Technologies' current subsidiary, Jiangsu Leimone, owns a majority stake of
TCB Digital, which offers highly customized and high quality Electronic
Manufacturing Service (EMS) for Original Equipment Manufacturer (OEM)
customers as well as its Own Brand Manufacturing (OBM) under the ZOOM, LEIMONE
and LONGTEL brand names. The Company's products are both exported globally and
sold domestically in People's Republic of China.Zoom Technologies also owns a
controlling interest in Portables Unlimited LLC, a cellular service and
products distributor in the U.S.
The Zoom Technologies, Inc. logo is available at
Certain statements in this press release may constitute "forward looking
statements" that involve risks and uncertainties. These include statements
about our expectations, plans, objectives, assumptions or future events in
which the outcome cannot be assured. You should not place undue reliance on
these forward-looking statements. Information concerning factors that could
cause our actual results to differ materially from these forward-looking
statements can be found in our periodic reports filed with the Securities and
Exchange Commission. We undertake no obligation to publicly release revisions
to these forward-looking statements to reflect future events or circumstances
or reflect the occurrence of unanticipated events.
CONTACT: Investor Contact:
Investor Relations Coordinator
Zoom Technologies, Inc.
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