Comments with regard to silver lake investment in spreadtrum communications
Some notes about the investment.
1) Silver Lake purchased total 5,828,210 ADS shares with cost of $38,919,050.85, which translates $6.68 per ADS share.
one ADS share represents 3 shares of ordinary shares. i.e. $2 per ordinary share is equivalent to $6 per ADS. The shares listed on NASDAQ global market that are traded publicly are ADS.
2) There is no new shares issued by the company Spreadtrum. No money is flowing to company's account. This deal is only to make effect of re-shaping shareholder structure to bring a new strategic major shareholder. Most importantly there are no dilutions for existing shareholders.
3) One of sellers in the agreement is Wu, Ping, who is the former CEO of the company. After this selling, he should have 5.79 million ordinary shares (1.93 million ADS) if he made no other arrangement to sell his shares since 2009. (He is reported to own 8.79 million ordinary shares in 2008 annual report
http://www.corporate-ir.net/Media_Files/IROL/21/212408/SPRDAnnualReport20082.pdf )
Historically he complained the company shareholder structure is too diversified, not efficient for the management to make strategic decisions. Well it could be.
1) Silver Lake purchased total 5,828,210 ADS shares with cost of $38,919,050.85, which translates $6.68 per ADS share.
one ADS share represents 3 shares of ordinary shares. i.e. $2 per ordinary share is equivalent to $6 per ADS. The shares listed on NASDAQ global market that are traded publicly are ADS.
2) There is no new shares issued by the company Spreadtrum. No money is flowing to company's account. This deal is only to make effect of re-shaping shareholder structure to bring a new strategic major shareholder. Most importantly there are no dilutions for existing shareholders.
3) One of sellers in the agreement is Wu, Ping, who is the former CEO of the company. After this selling, he should have 5.79 million ordinary shares (1.93 million ADS) if he made no other arrangement to sell his shares since 2009. (He is reported to own 8.79 million ordinary shares in 2008 annual report
http://www.corporate-ir.net/Media_Files/IROL/21/212408/SPRDAnnualReport20082.pdf )
Historically he complained the company shareholder structure is too diversified, not efficient for the management to make strategic decisions. Well it could be.
Answers
The official SEC filing is located at
http://www.sec.gov/Archives/edgar/data/1287950/000095012310027902/c98285sc13d.htm
The Purchaser entered into the following:
The Purchaser entered into the following:
(i) a share purchase agreement, dated as of January 29, 2010 (the “Pacific Share Purchase Agreement”), among Pacific Technology Partners, L.P., Pacific Technology Advisors, LDC and Pacific United Technology, L.P. (collectively, the “Pacific Entities”) and the Purchaser, pursuant to which the Pacific Entities sold to the Purchaser, and the Purchaser purchased from the Pacific Entities, 2,019,099 ADSs (the “Pacific Shares”) at a price of US$6.75 per ADS on February 8, 2010;
(ii) a share purchase agreement, dated as of March 15, 2010 (the “Fortune Share Purchase Agreement”), among Fortune Consulting Group, Inc., a Taiwan exempted company, Golden Technology Venture Capital Investment Corp., a Taiwan exempted company, Cosmos Technology Venture Capital Investment Corp., a Taiwan exempted company, Legend Technology Venture Capital Investment Corp., a Taiwan exempted company, Titan Technology Venture Capital Investment Corp., a Taiwan exempted company, Central Technology Venture Capital Investment Corp., a Taiwan exempted company, Communication Technology Venture Capital Investment Corp., a Taiwan exempted company, Emerging Technology Venture Capital Investment Corp., a Taiwan exempted company, NCTU Spring I Technology Venture Capital Investment Corp., a Taiwan exempted company, Grand Cathay & Fortune Technology Venture Capital Investment Corp., a Taiwan exempted company, Fortune Technology Fund I Ltd., a Singapore exempted company, Fortune Technology Fund II Ltd., a Cayman Islands exempted company, Fortune IC Fund I., a Cayman Islands exempted company, Fortunetech Seed Fund Ltd., a Cayman Islands exempted company, and CMF Technology Fund I Ltd, a Cayman Islands exempted company (collectively, the “Fortune Entities”) and the Purchaser, pursuant to which the Fortune Entities sold and the Purchaser purchased 2,709,111 ADSs owned by the Fortune Entities (the “Fortune Shares”) at a price of US$6.60 per ADS on March 18, 2010;
(iii) a share purchase agreement, dated as of March 15, 2010 (the “Founder Share Purchase Agreement”) among Ping Wu and Joann Xu Wu, Trustees of the Ping and Joann Wu Family Trust Dated September 14, 2007, Ping Wu, Trustee of Joann Xu Wu Annuity Trust II Dated December 17, 2008 and Ping Wu, Trustee of Ping Wu Annuity Trust II Dated December 17, 2008 (collectively, the “Founders”) and the Purchaser, pursuant to which the Founders sold and the Purchaser purchased 3,000,000 Ordinary Shares owned by the Founders (the “Founder Shares”) at a price of US$2.25 per Ordinary Share on March 16, 2010; and
(iv) a share purchase agreement, dated as of March 15, 2010 (the “Legend Share Purchase Agreement”, and together with the Pacific Share Purchase Agreement, the Fortune Share Purchase Agreement and the Founder Share Purchase Agreement, the “Share Purchase Agreements”) between Legend New-Tech Investment Limited (“Legend” and together with the Pacific Entities, the Fortune Entities and the Founders, the “Sellers”) and the Purchaser, pursuant to which Legend sold and the Purchaser purchased 100,000 ADSs owned by Legend (the “Legend Shares” and together with the Pacific Shares, the Fortune Shares and the Founder Shares, the “Sale Shares”) at a price of US$6.60 per ADS on March 22, 2010.
(ii) a share purchase agreement, dated as of March 15, 2010 (the “Fortune Share Purchase Agreement”), among Fortune Consulting Group, Inc., a Taiwan exempted company, Golden Technology Venture Capital Investment Corp., a Taiwan exempted company, Cosmos Technology Venture Capital Investment Corp., a Taiwan exempted company, Legend Technology Venture Capital Investment Corp., a Taiwan exempted company, Titan Technology Venture Capital Investment Corp., a Taiwan exempted company, Central Technology Venture Capital Investment Corp., a Taiwan exempted company, Communication Technology Venture Capital Investment Corp., a Taiwan exempted company, Emerging Technology Venture Capital Investment Corp., a Taiwan exempted company, NCTU Spring I Technology Venture Capital Investment Corp., a Taiwan exempted company, Grand Cathay & Fortune Technology Venture Capital Investment Corp., a Taiwan exempted company, Fortune Technology Fund I Ltd., a Singapore exempted company, Fortune Technology Fund II Ltd., a Cayman Islands exempted company, Fortune IC Fund I., a Cayman Islands exempted company, Fortunetech Seed Fund Ltd., a Cayman Islands exempted company, and CMF Technology Fund I Ltd, a Cayman Islands exempted company (collectively, the “Fortune Entities”) and the Purchaser, pursuant to which the Fortune Entities sold and the Purchaser purchased 2,709,111 ADSs owned by the Fortune Entities (the “Fortune Shares”) at a price of US$6.60 per ADS on March 18, 2010;
(iii) a share purchase agreement, dated as of March 15, 2010 (the “Founder Share Purchase Agreement”) among Ping Wu and Joann Xu Wu, Trustees of the Ping and Joann Wu Family Trust Dated September 14, 2007, Ping Wu, Trustee of Joann Xu Wu Annuity Trust II Dated December 17, 2008 and Ping Wu, Trustee of Ping Wu Annuity Trust II Dated December 17, 2008 (collectively, the “Founders”) and the Purchaser, pursuant to which the Founders sold and the Purchaser purchased 3,000,000 Ordinary Shares owned by the Founders (the “Founder Shares”) at a price of US$2.25 per Ordinary Share on March 16, 2010; and
(iv) a share purchase agreement, dated as of March 15, 2010 (the “Legend Share Purchase Agreement”, and together with the Pacific Share Purchase Agreement, the Fortune Share Purchase Agreement and the Founder Share Purchase Agreement, the “Share Purchase Agreements”) between Legend New-Tech Investment Limited (“Legend” and together with the Pacific Entities, the Fortune Entities and the Founders, the “Sellers”) and the Purchaser, pursuant to which Legend sold and the Purchaser purchased 100,000 ADSs owned by Legend (the “Legend Shares” and together with the Pacific Shares, the Fortune Shares and the Founder Shares, the “Sale Shares”) at a price of US$6.60 per ADS on March 22, 2010.
The aggregate amount of funds used in connection with the purchase of the Sale Shares was US$38,919,050.85. These funds were provided from capital contributions of the partners of an investment fund affiliated with the Purchaser.