Cheetah Net Supply Chain Service Inc. Signs Definitive Agreement to Acquire Edward Transit Express Group Inc.
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Insights
The acquisition of Edward Transit Express Group Inc. by Cheetah Net Supply Chain Service Inc. represents a strategic expansion into the logistics sector, which is a critical component of global trade. The integration of Edward's services into Cheetah's offerings is expected to enhance operational efficiency by reducing overhead and expanding service capabilities to third-party parallel-import dealers. This move could potentially open new revenue streams for Cheetah and offer a competitive edge in the supply chain solutions market.
Investors should monitor the post-acquisition performance closely, as the success of such transactions can be contingent on the seamless integration of the acquired company's operations and culture. Furthermore, the issuance of unregistered Class A common stock as part of the acquisition cost could dilute existing shares, impacting shareholder value. The market will likely scrutinize the execution of this strategy and its effect on Cheetah's financial health and market position.
The financial structure of the acquisition, involving a cash payment and share consideration, reflects a balance between immediate financial expenditure and longer-term equity-based compensation. The valuation of the Share Consideration at 80% of the average closing price over a specified period suggests a strategic move to incentivize the deal without overpaying. Stakeholders should assess the potential impact of this acquisition on Cheetah's liquidity and capital structure, as well as the implications for earnings per share.
It is also important to consider the timing of the acquisition, as it comes at a point where global supply chains are increasingly complex and competitive. The ability of Cheetah to successfully leverage Edward's expertise in ocean and air transportation services could be a significant factor in its growth trajectory and stock performance. Investors and analysts will be keen to see how this acquisition aligns with Cheetah's long-term strategic goals and whether it delivers the anticipated synergies and cost savings.
From a supply chain perspective, the acquisition of a non-vessel operating common carrier like Edward could provide Cheetah with valuable assets in terms of global logistics networks and expertise in consolidation services. This is particularly relevant for handling loose cargoes and full containers, which are essential components of efficient supply chain management. The ability to offer enhanced logistics and warehousing services can be a game-changer for companies looking to improve their supply chain resilience and responsiveness.
Additionally, the focus on third-party parallel-import dealers indicates a strategic approach to tap into niche markets that require specialized supply chain solutions. By offering integrated services, Cheetah could streamline operations for these dealers, potentially leading to improved customer satisfaction and loyalty. The long-term success of this acquisition will depend on Cheetah's ability to integrate Edward's operations and maintain service quality while capitalizing on the synergies created.
CHARLOTTE, N.C., Jan. 30, 2024 (GLOBE NEWSWIRE) -- Cheetah Net Supply Chain Service Inc. (“Cheetah” or the “Company”) (Nasdaq CM: CTNT) today announced that it has executed a definitive agreement and its amendment thereto (the “Agreement”) for the acquisition (the “Acquisition”) of Edward Transit Express Group Inc. (“Edward”), a California-based global inbound non-vessel operating common carrier specializing in ocean and air transportation services. This strategic move marks Cheetah’s inaugural investment in the logistics sector. The Acquisition is expected to close within 20 calendar days from the signing of the Agreement.
Chairman and CEO Tony Liu commented, “[w]ith the Agreement now executed, we look forward to closing the Acquisition and to integrating Edward’s operations into Cheetah as soon as possible. We expect Edward’s logistics and warehousing services to reduce Cheetah’s operating overhead and, more importantly, to jumpstart Cheetah’s ability to offer these services to third-party parallel-import dealers. The Acquisition begins a new chapter in Cheetah’s plans to become an international provider of comprehensive and integrated supply chain solutions.”
The total Acquisition cost includes a cash payment of
Established in 2010, Edward provides weekly consolidation services through its agency network system. These services are catered to loose cargoes and full containers for both inbound and outbound shipments.
About Cheetah Net Supply Chain Service Inc.
Cheetah is a supplier of parallel-import vehicles sourced in the U.S. to be sold in the PRC market. In the PRC, parallel-import vehicles refer to those purchased by dealers directly from overseas markets and imported for sale through channels other than brand manufacturers’ official distribution systems. The Company purchases automobiles, primarily luxury brands such as Mercedes, BMW, Porsche, Lexus, and Bentley, from the U.S. market and resells them to the Company’s customers, including both U.S. and PRC parallel-import car dealers. The Company derives profits primarily from the price difference between the Company’s buying and selling prices for parallel-import vehicles.
Forward-Looking Statements
This press release contains certain forward-looking statements, including statements that are predictive in nature. Forward-looking statements are based on the Company’s current expectations and assumptions. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These statements may be identified by the use of forward-looking expressions, including, but not limited to, “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including its registration statement on Form S-1, as amended, under the caption “Risk Factors.”
For more information, please contact:
Cheetah Net Supply Chain Service Inc.
Investor Relations
(704) 826-7280
ir@cheetah-net.com
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