Message #16 From:
Stock News Bot Date: October 30, 2006 09:15:00 AM
CNCN News CinTel Agrees to Acquire 51% of Phoenix Semiconductor and Telecommunication (Suzhou) Co., Ltd. in China
LOUISVILLE, Ky.--(BUSINESS WIRE)--CinTel Corp. (CinTel) (OTCBB: CNCN), Korea's top Internet traffic
management (ITM) solution provider, is pleased to announce it has signed
a stock purchase agreement with STS Semiconductor & Telecommunications
Co., Ltd (STS) to acquire fifty-one percent (51%) ownership and equity
interests of Phoenix Semiconductor Telecommunication (Suzhou) Co., Ltd.
(PSTS) for an aggregate purchase price of $16.5 million. STS is a
KOSDAQ-listed subsidiary of BoKwang Group, and this purchase will give
CinTel a close strategic alliance with the BoKwang Group.
Deloitte Anjin LLC performed a valuation of PSTS as part of CinTel’s
due diligence. PSTS’s value, depending on
discount rates ranges, is between $54M and $83M USD based upon the
Discounted Cash Flow (DCF) method, which is based on forecasted cash
flows from the Company’s operations discounted
to the present value.
This agreement offers CinTel a unique opportunity to realize its new
long-term goal of expansion into a “Semiconductor
Specialized Company” by consolidating various
parts and/or companies involved in the semiconductor industry.
Management believes this acquisition of a majority stake in PSTS will
ensure that CinTel’s stream of profits will
grow exponentially in the near future.
This acquisition will allow CinTel to shift from its core business of
ITM (Internet Traffic Management), an increasingly competitive market
due to changes in technology and solutions, to one of the fastest
growing markets in the technology realm. Semiconductor, NAND Flash and
LCD chips, which are the focal products of PSTS, are high value-added
products. CinTel expects that its products’
revenues will grow at significantly better rates than industry averages.
PSTS’s major customer contract is with Samsung
Electronics and Hynix. Sales in 2005, when production commenced, were
about $12.8 million and sales in 2006 are expected to be more than $50
million with a long-term strategic contract with Samsung Electronics.
Sales in 2007 are expected to also grow rapidly, as are profits.
CinTel expects that the expansion of its semiconductor business will
start from the fast-developing and emerging Chinese market and gradually
move into the USA and EU markets. CinTel will continue to improve its
shareholder’s stock value and intends to work
towards listing on the NASDAQ Small Cap or American Stock Exchange
markets as soon as the opportunity arises.
Sang Don Kim, the CEO of CinTel, said, “CinTel’s
acquisition of a majority stake in PSTS, with its solid business model
and explosive growth and profit potential, is quite meaningful to CinTel
as a first step in a part of our long-term growth strategy. CinTel will
also be able to fulfill its promise to investors with positive profit
results this year. PSTS will be able to grow rapidly with the strong
support of key customers such as Samsung Electronics Corporation, from
which it was originally spun-off. I am confident this close strategic
partnership with STS, BoKwang Group and PSTS’s
customer Samsung Electronics Corporation will provide all our
shareholders the opportunity to see significant benefits and shareholder
value in the near future.”
Phoenix Semiconductor and Telecom was founded by STS in China in 2004 by
acquiring certain parts of the packaging production lines from Samsung
Electronics Corporation’s China plant (SESS).
It began mass production in 2005 and its main customers are Samsung
Electronics and Hynix, two of the largest semiconductor manufacturers in
the world. PSTS’s main products are
semiconductor packaging, NAND flash memory and LCD assembly.
STS Semiconductor and Telecommunication is a subsidiary of BoKwang Group
and the biggest semiconductor company in BoKwang’s
network. It began as a semiconductor packaging and testing specialty
company after spinning off from Samsung Electronics in 1998 and is now
becoming a leading semiconductor packaging company, as well as, a total
solution provider for memory application for home appliances,
semiconductor, TFT-LCD application products. STS was listed on KOSDAQ in
2001 and is being publicly traded now.
From its beginnings as a producer of TV cathode ray tubes and electronic
materials in 1983, BoKwang group has grown to a major conglomerate with
over 30 subsidiary companies in hi-tech, leisure, finance, retail,
logistic and culture businesses.
CinTel Corp., based in North America with its main business operations
in Korea, provides enterprise technology solutions that deliver faster
internal and external network service. Founded in 1997, CinTel
introduced Korea's first dynamic server load balancer, which has now
evolved into a world-class product line with ever expanding solutions
with key partners and internal development. CinTel's award-winning
Internet Traffic Management (ITM) solutions are marketed to customers
worldwide, enabling the company's customers to improve Internet and
network traffic management, service levels, secure content, user
experience, and reduce server loads and bandwidth demands. While CinTel
maintains its position as a leader in ITM through continuous research
and development efforts, it has also begun expansion into creative new
markets and worldwide distribution of Korean based technologies. CinTel
is also a recognized leader in Content Delivery Network (CDN). For
additional information, please visit CinTel Corp’s
website.
Safe-Harbor Statement
This press release may contain statements (such as projections regarding
future performance) that are forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from those projected as a result of certain risks and
uncertainties, including but not limited to those detailed from time to
time in the Company's filings with the Securities and Exchange
Commission.
