First M&A for STAR Market

Suzhou HYC Technology Co is acquiring an automated technology firm valued at 1.15 billion yuan (US$164.3 million), the first merger and acquisition case among companies listed in the Shanghai Stock Exchange’s STAR Market, the company said on Monday.

Suzhou HYC, which was the first company to launch an IPO on the new market, surged to the 20 percent daily cap on Monday to close at 39.4 yuan.

The company acquired Suzhou Olyto Automation Technology Co, an automation equipment, testing equipment and precision molds company. HYC will use its shares to pay 70 percent of the acquisition value, or 805 million yuan, and 30 percent for 345 million yuan in cash, according to the company’s statement to the exchange.

Between 2019 and 2021, Suzhou Olyto promises to contribute a profit of no less than 330 million yuan to Suzhou HYC.

The acquisition will improve Suzhou HYC’s profitability and expand its portfolios to sectors such as the wearable computing market, analysts said.