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Scienjoy To Acquire Hongle.tv For ~$43.8M

Scienjoy Holding Corporation ("Scienjoy", the "Company", or "We") (NASDAQ:SJ), a leading live entertainment mobile streaming platform in China, today announced that it has entered into

Benzinga · 12/29/2021 07:03

Scienjoy Holding Corporation ("Scienjoy", the "Company", or "We") (NASDAQ:SJ), a leading live entertainment mobile streaming platform in China, today announced that it has entered into an equity acquisition framework agreement (the "Agreement") to acquire 100% equity interest in Beijing Weiliantong Tech Co., Ltd ("Weiliantong"), which holds Hongle.tv, and 100% equity interest in Golden Shield Enterprises Limited ("Golden Shield"), which holds the NFT business for a total consideration of RMB280 million (approximately US$43.8 million). The objective of the Agreement is to support the Company's strategic growth initiative of acquiring the top-tier online live streaming platform Hongle.tv and expanding NFT business scope.

Launched in 2016, Hongle.tv is a mobile phone live streaming platform focusing on younger generation at the age of 18 to 25 years old. As of September 30, 2021, the cumulative number of broadcasters and users was 93,729 and over 42 million respectively. According to Analysys's data, Hongle.tv ranked second in terms of talent show category in the third quarter of 2021.

Pursuant to the Agreement, the aggregate consideration is RMB280 million (approximately US$43.8 million), including RMB180 million (approximately US$28.2 million) in the Company's Class A ordinary shares and RMB100 million (approximately US$15.6 million) in cash. The Class A ordinary share consideration payments are subject to certain performance conditions and requirements for the two years of 2022 and 2023. As part of the transaction, Junpeng Guo, one of the shareholders of Tianjin Yieryi Technology Co., Ltd. ("Tianjin Yieryi"), will pay Zhihui Qiyuan (Hainan) Investment Co., Ltd., a variable interest entity of the Company, RMB30 million (approximately US$4.7 million) to purchase the 12% equity interest of Tianjin Yieryi held by Zhihui Qiyuan (Hainan) Investment Co., Ltd.. The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the definitive agreements relating to the transaction, a copy of which will be furnished by the Company with the SEC as an exhibit to a Current Report on Form 6-K.

As the transaction proceeds, the Company will publicly disclose required information either through press releases or SEC filings, as appropriate.

Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, "We are very excited about the acquisition of Hongle.tv that will complement our existing living streaming platforms in terms of users, products, and functions as it marks our strategic consolidation in the talent show live streaming category. The acquisition will generate significant synergy and enhance the competitive advantages of Scienjoy in the industry. In addition, the acquisition of NFT business will help Scienjoy to continue developing a live streaming Metaverse. Upon completing the acquisition, we believe we are well positioned as a leader in the talent show live streaming to drive further expansion and growth in both live streaming platforms and Metaverse. The Company will further expand its content product offerings to provide users with an enhanced digital community and create more values for stakeholders."