FLJ Group Limited (NASDAQ: FLJ) (“FLJ” or the “Company”), a leading
technology-driven long-term apartment rental platform in China,
today entered into an equity acquisition agreement with Lianlian
Holdings Inc. (the “Target Company” or “Lianlian”) and certain of
the Target Company’s shareholders to acquire 95% of the issued and
outstanding shares in the Target Company for an aggregate purchase
price of RMB1,800,000,000 (the “Acquisition”). The purchase price
will consist of cash and newly issued Class A ordinary shares of
the Company, the exact portion of which will be determined by the
Company at the closing of the Acquisition. Upon the closing of the
Acquisition, Lianlian will be a 95%-owned subsidiary of the
Company.
There is no assurance that all conditions
precedent to the closing of the Acquisition, including among other
things, receipt of regulatory approvals, including applicable PRC
regulatory approvals, will be satisfied.
If the Acquisition is not completed within 180
days after the signing of the equity acquisition agreement, either
party may terminate the equity acquisition agreement.
About Lianlian
Lianlian is a lifestyle service provider
headquartered in Chengdu, China, providing comprehensive marketing
and promotion services to restaurants, hotels and other leisure and
entertainment merchants, helping them achieve cost-effective and
long-term operations. Product or service offered by these merchants
on Lianlian’s platform aim to fulfill people’s daily needs for
food, lifestyle and travel services.
About China’s Lifestyle Service
Industry
Lifestyle service is the service which connects
end consumers with local merchants such as hotels, restaurants and
other leisure and entertainment merchants through e-commerce
platform. The size of lifestyle service industry in China is large
and has huge growth potential. By 2025, the market size of
lifestyle service industry in China is expected to increase from
RMB19.5 trillion in 2020 to RMB35.3 trillion in 20251. The online
penetration rate2 is also expected to increase from 24.3% in 2020
to 30.8% in 20253. The growth potential of the industry poses a
considerable room for exploration. In the future, innovation around
merchant empowerment and user experience is expected to bring
incremental value to the industry.
Mr. Chengcai Qu, the chief executive
officer of the Company, said “We are pleased to welcome
the Lianlian brand and team into the FLJ platform. We are
optimistic about the quality of Lianlian’s service offering. We are
confident that we can work with the Lianlian team to further
strengthen its market position in the lifestyle service space.”
CEO of Lianlian comments: “We
have been overt about our efforts in recent years to provide
value-adding services to local merchants in China that drive their
business growth. We believe the Acquisition will better position us
to capture the growth trend in China’s lifestyle service industry
and our access to capital markets, which will in turn help further
our market position in the industry.”
1. Source: iiMedia Research 2. Online
penetration rate is calculated by dividing (i) the number of
leisure and entertainment merchants who utilize e-commerce platform
to promote their products or services by (ii) the total number of
merchants in the leisure and entertainment industry. 3.
Source: iiMedia Research
Forward-Looking Statements
This press release contains forward-looking
statements. These statements constitute “forward-looking”
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as “will,” “expects,”
“anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates” and similar statements. Among other things, the
quotations from management in this press release and the Company
and its subsidiaries’ (collectively, the “Group”) operations and
business outlook contain forward-looking statements. Such
statements involve certain risks, uncertainties and other factors
that could cause actual results to differ materially from those in
the forward-looking statements. These risks and uncertainties
include, but are not limited to the following: risks related to the
expected timing and likelihood of completion of the proposed
transaction, including the risk that the transaction may not close
before the long-stop date, or due to one or more closing conditions
to the transaction not being satisfied or waived, such as
regulatory approvals not being obtained, on a timely basis or
otherwise, or that a governmental entity prohibited, delayed or
refused to grant approval for the consummation of the transaction
or required certain conditions, limitations or restrictions in
connection with such approvals; the occurrence of any event, change
or other circumstances that could give rise to the termination of
the applicable transaction agreements; the risk that there may be a
material adverse change with respect to the financial position,
performance, operations or prospects of the Company or Lianlian;
risks related to disruption of management time from ongoing
business operations due to the proposed transaction; the risk that
any announcements relating to the proposed transaction could have
adverse effects on the market price of the Company’s securities or
result in significant fluctuations of the market price of the
Company’s securities; the risk that the proposed transaction and
its announcement could have an adverse effect on the ability of
Lianlian to retain customers and retain and hire key personnel and
maintain relationships with their suppliers and customers and on
their operating results and businesses generally; any changes in
the business or operating prospects of Lianlian or its businesses;
changes in applicable laws and regulations; risks relating to the
combined company’s ability to enhance its services and products,
execute its business strategy, expand its customer base and
maintain stable relationship with its business partners; the growth
of the lifestyle service industry in China; the Group’s strategic
review of its operations; the Group’s M&A strategies and its
ability to integrate any acquisitions, new business initiatives,
and strategic investment; the Group’s ability to access financing
on favorable terms in a timely manner and maintain and expand its
cooperation with financial institutions; the Group’s ability to
continue as a going concern in the future or achieve or maintain
profitability; the Group’s ability to effectively respond to the
challenges and uncertainties resulting from the COVID-19 pandemic
and other outbreaks and catastrophes; the Group’s ability to
control the quality of its operations, including the operation of
the rental apartments managed by third-party contractors; the
Group’s ability to manage its growth; the Group’s ability to
attract and retain tenants and landlords, including tenants and
landlords from its acquired lease contracts; the Group’s ability to
resolve disputes with third parties; the Group’s ability to manage
its brand and reputation; the Group’s goal and strategies; the
Group’s ability to compete effectively; and assumptions underlying
or related to any of the foregoing. Further information regarding
these and other risks is included in the Group’s filings with the
U.S. Securities and Exchange Commission. Except as required by law,
the Group does not undertake any obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
No Offer or Solicitation
This press release shall not constitute an offer
to sell or a solicitation of an offer to buy the securities of the
Company or Lianlian, nor shall there be any sale of any such
securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, or an exemption therefrom.
About FLJ Group Limited
FLJ Group Limited is a leading technology-driven
long-term apartment rental platform in China. The Company offers
young, emerging urban residents conveniently-located,
ready-to-move-in, and affordable branded apartments as well as
facilitates a variety of value-added services. The Company
leverages advanced IT and mobile technologies to manage rental
apartments in various cities in China. Technology is the core of
the Company’s business and is applied to its operational process
from apartment sourcing, renovation, and tenant acquisition, to
property management. The focus on technology enables the Company to
operate a large and dispersed portfolio of apartments with high
operational efficiency and deliver a superior user experience.
For investor and media inquiries, please
contact:
FLJ Group LimitedE-mail: ir@qk365.com
ChristensenIn ChinaMr. Rene VanguestainePhone:
+86-10-5900-1548E-mail: rene.vanguestaine@christensencomms.comIn
the U.S.Ms. Linda BergkampPhone: +1-480-614-3004Email:
linda.bergkamp@christensencomms.com
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