Borqs Technologies Acquired 51% of Holu Hou Energy LLC

Rhea-AI Summary

Borqs Technologies, Inc. (Nasdaq: BRQS) announced its acquisition of a 51% stake in Holu Hou Energy (HHE) as of October 19, 2021. The deal has successfully closed, with HHE's financial results set to be consolidated into Borqs starting Q4 2021. The purchase price will be determined based on HHE's performance in 2022 and 2023, with a revenue forecast of $48 million for HHE in 2022 already reaffirmed. Cash payments for the acquisition have been ensured through recent financing efforts.

Positive

• Acquisition of 51% stake in HHE strengthens market position in renewable energy.
• Forecasted revenue of $48 million for HHE in 2022 indicates growth potential.
• Secured cash payments through recent financing enhances liquidity for the transaction.

Negative

• Risks associated with the integration of HHE into Borqs' operations.
• Possibility that the acquisition may not yield the expected benefits.
• Impact of COVID-19 on supply chain and overall operational results.

• Borqs signed definitive agreements on October 19, 2021 with Holu Hou Energy (“HHE”) to acquire 51% ownership
• Purchase consideration in cash and ordinary shares of Borqs will be based on the performance of HHE in the years 2022 and 2023
• HHE financial results will be consolidated into Borqs beginning Q4 2021
• Reaffirms year 2022 HHE revenue forecast of $48 million
• Cash payments to HHE have already been secured in recent financing
  

SANTA CLARA, Calif., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Borqs Technologies, Inc. (Nasdaq: BRQS, “Borqs,” or the “Company”), a global provider of embedded software and products for the Internet of Things (IoT), today announced it signed definitive agreements dated October 19, 2021 and now owns 51% interest in Holu Hou Energy LLC (“HHE”), an innovative solar energy and storage provider for the residential, multi-family residential and commercial building markets. The acquisition transaction has closed successfully.

Financial results of HHE will be consolidated into Borqs beginning with the 4th calendar quarter of 2021; and the Company reaffirms the HHE revenue forecast of $48 million for the year 2022.

About Borqs Technologies, Inc.
Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio.

Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products. The Company is also currently in development of 5G products for phones and hotspots.

About Holu Hou Energy LLC
Holu Hou Energy LLC, a Delaware limited liability company, brings state-of-the-art energy storage systems to the Single-Family Residential, Multi-Family Residential and Commercial building markets. With operations in California, Hawaii, Wisconsin and Shanghai, HHE engineers proprietary storage system and software and control platform solutions. The HHE team is made up of renewable energy industry veterans, engineering and deploying energy storage systems that enable greater energy independence. For more information, visit www.holuhou.com.

Forward-Looking Statements and Additional Information
This press release includes “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “predicts”, “seeks”, “may”, “might”, “plan”, “possible”, “should” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect our management’s current beliefs. Many factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including the possibility that the acquisition of a 51% ownership interest in HHE may not bring positive benefits to the Company and may not transpire as described herein or at all, and the negative impact of the COVID-19 pandemic on the Company’s supply chain, revenues and overall results of operations, so the reader is advised to refer to the Risk Factors sections of the Company’s filings with the Securities and Exchange Commission for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:
Sandra Dou
Vice President of Corporate Finance
Borqs Technologies, Inc.
sandra.dou@borq.net
www.borqs.com

FAQ

What is the acquisition agreement between Borqs and Holu Hou Energy?

Borqs has acquired a 51% stake in Holu Hou Energy, with the deal closing on October 19, 2021.

What is the expected revenue forecast for Holu Hou Energy in 2022?

Holu Hou Energy is forecasted to generate $48 million in revenue for the year 2022.

How will Holu Hou Energy's financial results impact Borqs?

HHE's financial results will be consolidated into Borqs' financial statements starting Q4 2021.

How was the acquisition purchase price determined?

The purchase consideration will be based on Holu Hou Energy's performance in 2022 and 2023.

Are there any risks associated with the acquisition?

Yes, there are risks involving integration challenges and the potential for the acquisition to not produce expected benefits.