Quhuo Limited (NASDAQ: QH) (“Quhuo,” the “Company,” “we” or “our”), a leading tech-enabled workforce operational solution platform in China, today announced that it has entered into a definitive investment agreement (the “Agreement”) to acquire a 54.22% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd. (“Lailai”), an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs, for a total consideration of approximately RMB133.0 million in the form of cash and the Company’s securities in aggregate.
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According to the Agreement, the Company agreed to issue 1,357,759 Class A ordinary shares of the Company (“Consideration Shares”) to the selling shareholders of Lailai under a private placement pursuant to an exemption or exclusion from the registration requirements under the Securities Act of 1933. The Consideration Shares will be subject to relevant restrictions on transfer. The Company has agreed to repurchase the Consideration Shares or pay the balance of the resale price if the resale price of the Consideration Shares falls below an indicative minimum price within a certain period after the transfer restrictions expire.
The parties expect to close the transaction in October 2020, subject to the relevant corporate approvals and customary closing conditions. There is no assurance that any such procedures or transactions will be completed in a timely manner.
Leslie Yu, Chairman and Chief Executive Officer of the Company, commented, “After extensive discussions with Lailai ‘s highly experienced management team, I am pleased that we were able to sign the definitive investment agreement. We believe that this strategic partnership will bring significant benefits to both companies. Our housekeeping solution is one of our new growth drivers and this transaction is part of a greater strategic plan to scale our housekeeping solution business by enhancing our management and fulfillment capabilities, which allows us to broaden and diversify our housekeeping service scope. Lailai has done a fantastic job in building a talented team, a highly recognizable brand, solid supply chain management capabilities and strong customer base. This investment allows us to integrate our capabilities serving hotels and B&Bs in China and create enormous operational synergies that will capture additional value in the markets Lailai currently serves. By investing in Lailai, we expect to strengthen and expand our platform, capitalize on the growing on-demand service needs in China and drive sustainable long-term growth for our shareholders.”
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