Rumor: VisionChina Media to Acquire Towona
21st Century Business Herald, 7/24/09
According to a source close to the transaction, out-of-home advertising company VisionChina Media (Nasdaq: VISN) is currently planning to acquire public transport digital media group Towona for USD 140 mln, but changing circumstances in the second half of the year have caused talks to stall. "Besides disagreements about the sale price," the source said, "the scuppering of Towona's plans to list and its investors' eagerness to get their cash back have also become stumbling blocks in the talks with VisionChina."
In April 2009, Towona chairman and CEO Gareth Chang said that Towona would raise a fourth round of funding, and could potentially consider new acquisitions. An industry insider revealed that the investment group for this fourth round would once again be Baring Asset Management with an investment of USD 15 mln. After four rounds of investment, Towona had raised USD 110 mln, with USD 65 mln coming from Baring alone. In Towona's proposed plan for the acquisition, a price of USD 140 mln would purchase a 27% stake in the company, increasing the company's estimated value to USD 520 mln.
The same source said that the two companies are still trying to find one another's bottom lines, and that the transaction ultimately will not take place any earlier than November or December, and could even be delayed until February or March of next year. He also revealed that a Deloitte auditing team has set up at Towona.
Towona standing VP Cui Bin said, however, that the Deloitte auditing team was merely performing a routine audit. Cui said that information regarding a possible merger was an internal secret of great sensitivity, and that the company has no plans to divulge any information publicly.
Keywords: Baring Asia Cui Bin funding Towona VisionChina VISN in-vehicle display out-of-home display Gareth Chang fourth-round M&A television
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