Simpson Thacher is representing PAG Asia Capital in connection with a going private transaction involving Funtalk China Holdings Limited (“Funtalk”) proposed by a consortium comprised of ARCH Digital Holdings Ltd., Capital Ally Investments Limited, GM Investment Company Limited, Sinowill Holdings Limited, which is controlled by the chairman of the board of directors of Funtalk, Mr. Kuo Zhang, Huge Harvest Enterprises Limited, which is wholly owned and controlled by the chief executive officer of Funtalk, Mr. Dongping Fei, Kingstate Group Limited, which is wholly owned and controlled by Mr. Hengyang Zhou, executive president of Beijing Funtalk Century Technology Group Company Limited, an indirect wholly owned subsidiary of Funtalk, and Trend Focus Limited, which is wholly owned and controlled by Mr. Francis Kwok Cheong Wan, senior vice president of corporate investor relations of Funtalk (collectively, the “Consortium”). Funtalk has entered into a definitive agreement with Fortress Group Limited (“Parent”), which is a newly-formed entity owned by the Consortium, and Fortress Merger Sub Limited (“Merger Sub”), pursuant to which Parent will acquire Funtalk for $7.20 per share. The transaction values Funtalk’s equity at approximately $443 million.
In connection with the transaction, PAG Asia Capital, Parent and the Consortium have entered into subscription agreement pursuant to which PAG Asia Capital has agreed to subscribe for equity-linked securities of Parent, subject to certain conditions, the proceeds of which shall be used in part to provide financing for the transaction.
PAG Asia Capital is an Hong Kong-based private equity fund focused on making investments in industry-leading businesses in Asia. Funtalk is a retailer and distributor of wireless communications devices, accessories and content in 30 provinces in China. The Company has branch offices and regional distribution centers, operates a chain of mobile phone retail stores and has an internet retailing platform. Funtalk’s shares are listed on the NASDAQ Global Market.
The Simpson Thacher team includes Kathryn King Sudol, Ian Ho, Justin Wong (M&A, Hong Kong office) Jin Park and Kristina Kang (Capital Markets, Hong Kong office), Sinead O’Shea (Financing, Hong Kong office) and Katherine Moir and Daniel Foster (Tax, Palo Alto office).
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