NEW YORK and SHANGHAI, March 13, 2017 /PRNewswire/ -- Borqs International Holding Corp ("Borqs"), which on December 27, 2016 entered into a definitive merger agreement with Pacific Special Acquisition Corp. ("Pacific", NASDAQ: PAACU, PAAC, PAACR and PAACW), today announced that, as part of a preferred stock financing, it has closed an investment in Borqs led by Qualcomm Ventures, the investment arm of Qualcomm Incorporated. Borqs is a leading global provider of smart connected devices and cloud service solutions for the Internet of Things ("IoT") industry.
Borqs is a leading IoT products and solutions provider, with major R&D centers in Bangalore and Beijing. Borqs was founded in 2007 by veterans in the communication technologies industry from Canada, China, India and the United States. Borqs' investors include Intel Capital, Norwest Venture Partners, SK Telecom China Fund, Keytone Ventures and GSR Ventures. After the Qualcomm Ventures investment, Borqs has a shareholder base that includes two of the largest chip manufacturers in the world.
"Qualcomm Ventures is already an active investor in several Indian startups. Our investments in India help fuel innovation and foster promising startups, such as Borqs, that are contributing to the mobile and Internet of Things ecosystem. This investment will fund additional engineering capabilities to invigorate advances in the development of autonomous products and a connected society. Qualcomm hopes to find future opportunities to work with Borqs to share leading-edge and innovative 4G phone design expertise with Indian and global OEMs in support of Prime Minister Narendra Modi's vision of Design in India," said Karthee Madasamy, Vice President and Managing Director, Qualcomm Ventures India.
Pat Chan, founder, Chairman and CEO of Borqs, said: "We are honored to have a strategic investment from Qualcomm Ventures. The India market is growing rapidly and represents a sizable revenue opportunity for Borqs' business. We are committed to working on developing new technologies for the global market." Hareesh Ramanna, General Manager of Connected Solutions and Managing Director of Borqs India, further commented: "Borqs has a strong R&D team in India and we have been working closely with Qualcomm in the past several years to develop products being used worldwide. Given our focus on innovation, Borqs is committed to supporting the Indian Government's Made-In-India initiative and Qualcomm's Designed-In-India initiative."
Yaqi Feng, Chief Operating Officer of Pacific, remarked, "We are excited by this development at Borqs, and we expect that, as a leading IoT products and solutions provider, Borqs' business will grow quickly in India and China, as well as in the U.S. markets. With investors such as Qualcomm Ventures and Intel Capital, we believe Borqs is well-positioned to achieve rapid growth and provide its investors with strong returns."
Upon the closing under the merger agreement, Borqs will become the operating entity of the combined Pacific-Borqs company. It is anticipated that the shareholders of Borqs will collectively own approximately 78% of the combined company's outstanding ordinary shares, and Pacific's existing shareholders will retain an ownership interest of approximately 22%. It is expected that after the closing, the combined company will change its name to "Borqs Technologies, Inc."
Pacific is a blank check company, also commonly referred to as a Special Purpose Acquisition Company, or SPAC, formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination with one or more businesses or entities. Pacific's efforts to identify a target business have not been limited to a particular industry or geographic region, although it intends to focus efforts on seeking a business combination with a company or companies that have their primary operations located in Asia, with an emphasis on China. Pacific is sponsored by Zhengqi International Holding Limited, a subsidiary of Pacific Securities Co. Ltd., a publicly traded company in China (Ticker 601099.SS). LH Group Holdings Inc., the largest shareholder of Pacific Securities Co. Ltd., invests in financial services, clean energy as well as golf course and resort businesses globally and currently has billions of U.S. dollars in assets.
Borqs is recognized as a global leader in smart connected devices and IoT solutions. Deloitte named Borqs as one of the fastest growing technology companies in China & Asia Pacific in 2011, 2012 and 2013. In 2013, 2014 and 2015, Borqs was named Company of the Year for Innovation & Leadership in Mobile Technology for Asia Pacific from the International Alternative Investment Review. Recently Borqs received the "50 Most Promising IoT Solution Providers 2016" recognition from CIO Review magazine.
Borqs has a proven track record in design, development and commercial shipments of various Android devices and is a Google GMS licensed partner. Qualcomm Technologies, Inc. has chosen to work with Borqs for its Android based platforms. Borqs is one of the companies that Qualcomm Technologies is working with in the wearables segment and is pursuing multiple smartwatches and connected kid watches based on Qualcomm® Snapdragon™ Wear*. Additionally, Borqs launched the FDD/TDD combined carrier aggregation high speed 4G Android phone for Reliance Jio in India.
Borqs' broad customer base and target markets include OEMs such as Vizio and Fossil, operators like AT&T and Sprint in the U.S. and Reliance Jio in India, and IoT solution providers to restaurants and the utility, public safety and hospitality categories.
Borqs believes that its modular platform architecture and its ability to tailor Android for various vertical applications and form factors, together with its flexible BorqsWare platform, are keys to its success. Borqs has a pipeline of products ranging from tablets, phones, smartwatches, smart appliances, POS terminals and digital signage to in-vehicle infotainment (IVI), for various well known international brands.
The proposed merger between Borqs and Pacific will be submitted to the shareholders of Pacific for their approval. In connection with that approval, Pacific filed with the Securities and Exchange Commission (the "SEC") a preliminary proxy statement on February 13, 2017 containing information about the proposed merger and the respective businesses of Borqs and Pacific. After the SEC completes its review of the preliminary proxy statement, Pacific intends to file with the SEC a definitive proxy statement in connection with the proposed merger and other matters and will mail a definitive proxy statement and other relevant documents to its shareholders as of the record date to be established for voting on the proposed merger.
Shareholders of Pacific and other interested persons are advised to read the preliminary proxy statement filed with the SEC and, once available, any amendments thereto and the definitive proxy statement, in connection with Pacific's solicitation of proxies, because these documents will contain important information. Such persons can also read Pacific's annual report on Form 10-K for the fiscal year ended June 30, 2016 for a description of the security holdings of Pacific's officers and directors and their respective interests as security holders in the successful consummation of the proposed merger, and other information. Pacific's definitive proxy statement will be delivered to shareholders of Pacific as of a record date to be established for voting on the proposed merger and other matters as set forth in the definitive proxy statement. Shareholders will also be able to obtain a free copy of the proxy statement, as well as other filings containing information about Pacific, without charge, at the SEC's website (www.sec.gov) or by calling 1-800-SEC-0330. Copies of the proxy statement and other filings with the SEC can also be obtained, without charge, by directing a request to Pacific at 855 Pudong South Road, the World Plaza, 27th Floor, Pudong, Shanghai, China, 200120.
Participants in the Solicitation
Pacific and its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies from Pacific's shareholders in respect of the proposed merger. Information regarding Pacific's directors and executive officers is available in its annual report on Form 10-K for the fiscal year ended June 30, 2016 and in Pacific's preliminary proxy statement filed with the SEC on February 13, 2017. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be contained in the definitive proxy statement relating to the transaction with Borqs when it becomes available and which can be obtained free of charge from the sources indicated above.
This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Pacific or Borqs, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
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", "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 both Borqs' and Pacific's managements' current beliefs. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements. Such factors include, among other things: the possibility that the merger will not close or that the closing may be delayed because conditions to the closing may not be satisfied, including shareholder and other approvals; the performances of Pacific and Borqs; the ability of the combined company to meet the NASDAQ Capital Market's listing standards; the reaction of Borqs customers to the merger; unexpected costs, liabilities or delays in the transaction; the outcome of any legal proceedings related to the transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; and general economic conditions. In addition, please refer to the Risk Factors section of Pacific's Proxy Statement and its Forms 10-K and 10-Q 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, Pacific disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
* Qualcomm and Snapdragon are trademarks of Qualcomm Incorporated, registered in the United States and other countries. Snapdragon Wear is a trademark of Qualcomm Incorporated.