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Affluent Partners to acquire 33% stake in Dellos Group

Published 19 April 2017

Affluent Partners has entered into a conditional agreement to purchase 33% of the entire issued share capital of Dellos Group, for HK$79.2m ($10.19m).

Dellos Group Limited is an investment holding company incorporated in the Cayman Islands with limited liability. Currently, it holds the entire equity interest of Dellos BVI, which is an investment holding company incorporated in the BVI with limited liability, and in turn holds the entire equity interest of Dellos Korea and Dellos Hong Kong.

Dellos Korea is a limited liability company incorporated in Korea. It is principally engaged in the manufacturing, sale and distribution of fruit juice and other beverage products. The products of Dellos Korea can broadly be divided into can beverages, bottle beverages and fruit jams, under the established brand of "Dellos."

Currently, these products are sold in Korea and over 40 other countries around the globe, spanning European Union, Russia, Middle Asia, South America and Africa.

Recently, it has been actively expanding its distribution channels in the Korean domestic market. In 2016, Dellos Korea entered into a direct sales agreement with a convenience store chain in Korea, pursuant to which, particular "Dellos" beverage products will be sold through its chain of convenience stores across the country.

In 2016, Dellos Korea also entered into supply agreements with the Korea government for the provision of juice products to certain government departments. Apart from its own brand products, Dellos Korea also provides original equipment manufacturing (OEM) services to a number of reputable and large-scale beverage companies.

In addition, Dellos Korea jointly developed the nano water-soluble technology (the "Nano Technology") with an Independent Third Party. This technology is applied to the manufacturing process of their beverages, which in turn, enable the beverage products to enhance the digestive and absorptive functions of the human body.

Since consumers nowadays are increasingly looking to beverages to play new roles in their diets and health routines, they place high priorities on making healthy purchases.

With the increasing emphasis on healthy beverages, the demand for "Dellos" beverages using this Nano Technology is expected to experience a growth in the global market.

Dellos Korea has its own manufacturing facilities in Wonju-si, Gangwon-do, Korea with a total land area of 9,103 square meters. In addition, Dellos Korea has obtained a number of international professional certificates as well.

According to the agreement, the total consideration shall be satisfied by: cash payment of HK$3.5m ($450,000); and the allotment and issue of approximately 19.9 million Consideration Shares in the aggregate value of HK$75.7m ($9.74m) at the issue price of HK$3.81 ($0.49) per Consideration Share to the vendors. The issue price represents a premium of approximately 1.33% over the closing price of HK$3.76 ($0.48) per Share, as quoted on the Stock Exchange yesterday.

There is a profit guarantee attached to the agreement, which shall be capped at 35% of the Consideration.

Source: Company Press Release