PAX Global Technology Limited — M&A Activity 2016

Dec 28, 2016

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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PAX Global Technology Limited 百富環球科技有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 327)

VOLUNTARY ANNOUNCEMENT ACQUISITION AND SUBSCRIPTION OF AN AGGREGATE OF 60% CORPORATE CAPITAL OF CSC ITALIA S.R.L.

ACQUISITION AND SUBSCRIPTION AGREEMENT

The Board is pleased to announce that on 28 December 2016, the Subscriber, a whollyowned subsidiary of the Company, entered into the Acquisition and Subscription Agreement with the Existing Company and the Existing Company Quotaholders in respect of the Acquisition and Subscription, pursuant to which the Transformation shall be one of the Conditions Precedent to Completion. Immediately after Completion, the Subscriber shall hold a total of 60% of the entire corporate capital in the Target Company.

The Acquisition and Subscription does not constitute a transaction required to be disclosed under Rule 13.09, Chapter 14 and Chapter 14A of the Listing Rules, or pursuant to the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.

This is a voluntary announcement made by the Company for the purpose of keeping the potential investors and Shareholders informed of the latest business development of the Group.

THE ACQUISITION AND SUBSCRIPTION

On 28 December 2016, the Subscriber, the Existing Company and the Existing Company Quotaholders entered into the Acquisition and Subscription Agreement, pursuant to which: (i) the Subscriber has agreed to acquire and the Existing Company Quotaholders have agreed to sell the Acquisition Quota for a consideration of EUR2,500,000.00 (subject to conditions provided thereunder); and (ii) the Subscriber has agreed to acquire by way of subscription the New Quota for a consideration of EUR500,000.00. The details of the Acquisition and Subscription Agreement are summarized as follows:

• For identification purposes only

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THE ACQUISITION AND SUBSCRIPTION AGREEMENT

Date: 28 December 2016

Parties: (i) the Subscriber;

• (ii) the Existing Company; and

• (iii) the Existing Company Quotaholders. (collectively the “ Parties ”)

The Existing Company is a consortium company incorporated in Italy with limited liability and is principally engaged in the businesses of installation and technical assistance on E-Terminals, personal computers, systems cash-in or cash-out and Automatic Teller Machines in Italy. As at the date of the Acquisition and Subscription Agreement, the entire capital stock of the Existing Company are owned by the Existing Company Quotaholders and the Existing Company will be transformed into the Target Company as one of the Conditions Precedent of Completion.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Existing Company, each of the Existing Company Quotaholders and their respective ultimate beneficial owners, if any, are Independent Third Parties.

Subject of the Acquisition and Subscription

Immediately after Completion, the Subscriber shall hold a total of 60% of the enlarged corporate capital in the Target Company. The Acquisition Quota and the New Quota will be transferred and issued respectively to the Subscriber free from all liens, charges, encumbrances, equities and third party rights and together with all rights attached.

Consideration

I. For the Acquisition

The consideration of the Acquisition is arrived at between the Parties at EUR2,500,000.00 at arm’s length and shall be payable to the Existing Company Quotaholders by way of cash in 3 installments as follows:–

• (i) EUR1,750,000.00 payable upon Completion;

• (ii) EUR250,000.00 payable within 10 (ten) Business Days from the date of issuance of the audited financial statements of the Target Company of the financial year ending 31 December 2017 (the “ Second Payment ”); and

• (iii) EUR500,000.00 payable within 10 (ten) Business Days from the date of issuance of the audited financial statements of the Target Company of the financial year ending 31 December 2018 (the “ Final Payment ”);

provided that the Second Payment and the Final Payment will be subject to the following conditions.

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Conditions for the Second Payment and the Final Payment

• (a) Should the audited net profit of the Target Company for the period from Completion to the expiry of 1 (one) calendar month from Completion be negative, the Subscriber shall have no obligation to effect both the Second Payment and Final Payment, which shall no longer be part of the consideration for the Acquisition.

• (b) Subject to paragraph (a) hereinabove, should the audited net profit of the Target Company for the financial year ending 31 December 2017 be less than EUR80,000.00, the Subscriber shall have no obligation to effect the Second Payment, which shall no longer be part of the consideration for the Acquisition.

• (c) Also subject to paragraph (a) hereinabove, should the audited net profit of the Target Company for the financial year ending 31 December 2018 be less than EUR140,000.00, the Subscriber shall have no obligation to effect the Final Payment, which shall no longer be part of the consideration for the Acquisition.

II. For the Subscription

The consideration for the Subscription is EUR500,000.00 and shall be payable to the Target Company upon Completion. Out of the EUR500,000.00, a nominal amount of EUR47,812.50 shall be capital contribution and the remaining EUR452,187.50 shall be premium on the subscribed quota to be accounted amongst the reserve of the Target Company.

Other major terms

Transformation of the Existing Company to the Target Company

As one of the Conditions Precedent of Completion, the Existing Company shall be transformed from a consortium company with limited liability, a business entity previously set up for non-profit purpose under the laws of Italy, to a company with limited liability to be duly incorporated and registered under the laws of Italy (the “ Transformation ”).

Capital Increase

As soon as practicable following Completion, the Existing Company Quotaholders and the Subscriber shall convene general meetings of the Target Company to cause the Target Company to increase its corporate capital by a total of EUR527,812.50 (the “ Capital Increase ”), out of which the Subscriber shall contribute EUR500,000.00 by way of Subscription and the Existing Company Quotaholders shall in aggregate contribute the remaining EUR27,812.50 by way of direct contribution to the share capital of the Target Company.

Immediately after to the Capital Increase, the Subscriber’s final quotaholding of the Target Company shall remain to be 60% of the Target Company’s enlarged corporate capital.

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Shareholder Loan to the Target Company

The Subscriber has also agreed to grant to the Target Company a non-interest bearing and unsecured shareholder loan in the amount of EUR500,000.00 (the “ Shareholder Loan ”) within 30 days of the closing of the Capital Increase to facilitate the business development of the Target Company. The Shareholder Loan shall have an initial term of 3 years, which may be further extended by mutual agreement of the Subscriber and the Target Company.

Completion

Completion shall take place on a date after execution of the Acquisition and Subscription Agreement and fulfilment of all Conditions Precedent (or waiver thereof where applicable) as provided therein to the reasonable satisfaction of the Subscriber.

In the event not all the Conditions Precedent are satisfied or otherwise expressly waived by the Subscriber by 31 January 2017 or on such other date as may, at the sole discretion of the Subscriber, be extended by the Subscriber, the Acquisition and Subscription Agreement shall lapse and cease to have effect and none of the Parties shall have any claim against the other(s), save for antecedent breaches.

REASONS FOR AND BENEFITS OF THE ACQUISITION AND SUBSCRIPTION

The Existing Company is one of the largest service providers of installation and maintenance of E-payment Terminals and other electronic devices in Italy and operates with a network of associated companies and also through certified partners and the Group is a global E-payment Terminal solutions provider engaged in the development and sale of E-payment Terminal products and provision of related supporting services.

While the Group aims at strengthening its market position in Italy by carrying out further vertical integration in the E-payment value chain, through integrating the Target Company’s capabilities of the provision of installation and maintenance services to E-payment Terminals, the Group will be able to provide one-stop service in turn-key projects of electronic payment solutions, so as to keep in-line with the trend of market demand and capture the potential business opportunities arisen. The Directors believe that the Acquisition and Subscription is in line with the Group’s investment strategy and the Shareholder Loan will provide more funds for expansion of the Target Company’s business to capture more business opportunities and benefit the Group in the long run.

Immediately after Completion, the Target Company will become an indirect subsidiary of the Company and the accounts of the Target Company will be consolidated to the accounts of the Company. As such, the recurring service income generated from the Target Company will also enhance the Company’s financial profile through diversification of revenue streams.

The terms of the Acquisition and Subscription Agreement were determined after arm’s length negotiations between the parties thereto and the Directors consider that the terms and conditions therein are fair and reasonable and on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.

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GENERAL

The Acquisition and Subscription does not constitute a transaction required to be disclosed under Rule 13.09, Chapter 14 and Chapter 14A of the Listing Rules, or pursuant to the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the SFO.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the meanings set out below:

• “Acquisition” the acquisition of the Acquisition Quota by the Subscriber pursuant to the Acquisition and Subscription Agreement

• “Acquisition and the agreement of Acquisition and Subscription dated Subscription Agreement” 28 December 2016 entered into by and between the Subscriber, the Existing Company and the Existing Company Quotaholders

• “Acquisition Quota” such quota being the subject of the Acquisition, which in aggregate represents 50% of the corporate capital of the Target Company immediately following completion of the Acquisition

• “Board” the board of directors of the Company

• “Business Day” any day other than (i) a Saturday, Sunday; (ii) a day on which banking institutions in Milan are authorized or obligated to close by law, executive order or any regulations specifically applicable to banking institutions; and (iii) a day on which licensed commercial banks in Hong Kong are not open for general banking business for members of public in Hong Kong

• “Company” Pax Global Technology Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 327)

• “Completion” Completion of the Acquisition and the Subscription

• “Conditions Precedent”

• the conditions precedent provided in the Acquisition and Subscription Agreement

• “Director(s)” the director(s) of the Company

• “EUR” or “€”

Euro dollar, the lawful currency of the European Union

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“Existing Company”

CSC Italia S.c.a.r.l., a consortium company incorporated with limited liability under the laws of Italy which will be transformed into the Target Company as one of the Conditions Precedent to Completion

• “Existing Company Quotaholders”

• the quotaholders of the Existing Company in aggregate holding the entire corporate capital in the Existing Company as at the date of the Acquisition and Subscription Agreement

• “Group”

• the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Third Party(ies)”

• third party(ies) independent of the Company and connected persons of the Company in accordance with the Listing Rules

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “New Quota” such quota being the subject of the Subscription, which represents 10% of the corporate capital of the Target Company upon Completion as enlarged by the issue of such quota

• “Shareholder(s)” holder(s) of the issued ordinary share(s) of the Company

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscriber” Pax Technology Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• “Subscription” the subscription of the New Quota by the Subscriber by way of subscription pursuant to the Acquisition and Subscription Agreement

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“Target Company”

CSC Italia S.r.l., a company incorporated in Italy with limited liability which will be transformed into from the Existing Company as one of the Conditions Precedent to Completion

“%”

per cent

By Order of the Board PAX Global Technology Limited Li Wenjin Executive Director

Hong Kong, 28 December 2016

As at the date of this announcement, the Board comprises three Executive Directors, namely, Mr. Nie Guoming, Mr. Lu Jie and Mr. Li Wenjin and three Independent Non-Executive Directors, namely Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles.

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