BEIJING, Sept. 15 /PRNewswire-Asia/ -- China TransInfo Technology Corp., (Nasdaq: CTFO), ("China TransInfo" or the "Company"), a leading provider of public transportation information systems technology and comprehensive solutions in the People's Republic of China ("PRC"), today announced that it expanded further into the transportation systems market in China through an indirect investment in Beijing UNISITS Technology Co. Ltd ("UNISITS").
Established in 2002 and headquartered in Beijing, UNISITS is a leader in China's intelligent transportation systems industry. UNISITS primarily provides traffic engineering E&M systems for expressways in China. Presently, the company has penetrated over 20 provinces with an accumulated coverage of over 8,000 kilometers of expressways in China. Through its close cooperation with Tsinghua University, UNISITS has developed an expressway weigh-in-motion system and lighting control system, both of which have been widely applied in a number of provinces in China.
In addition, UNISITS provides intelligent transportation products and services to railways, and urban transportation markets. UNISITS has also developed a comprehensive nationwide service network to provide technical assistance for its products. In 2008, UNISITS generated approximately $32.2 million in revenue and $3.8 million in net income.
On September 8, 2009, Mr. Shudong Xia, Chairman and Chief Executive Officer of China TransInfo, executed agreement to acquire a 35.17% equity interest in UNISITS from Unisplendour Corporation Limited ("Unisplendour") with a cash payment of RMB 44.4 million (approximately $6.5 million). Subsequently, on September 8, 2009, China TransInfo Technology Group Co., Ltd, a variable interest entity of China TransInfo (the "Group Company") entered into an option agreement with Mr. Xia, under which Mr. Xia granted to the Group Company a perpetual option to acquire all of Mr. Xia's equity interest in UNISITS for RMB 44.4 million (the "exercise price"). The exercise price of the option was prepaid upon the granting of the option. Concurrently, the Group Company acquired from Mr. Xia the rights to his share of all potential UNISITS dividends or other distributions. As a result, the Company will begin recording 35.17% of UNISITS net income (loss) in the Company's financial statements, effective the third quarter of 2009, since Mr. Xia pledged his equity interest in UNISITS to the Group Company for five years. The Group Company expects to exercise the option and take title to the equity interest now held by Mr. Xia upon the expiration of the five-year term of the pledge agreement when the option will first become exercisable. The transaction is expected to be accretive to earnings beginning in the third quarter of 2009.
"We are very excited to partner with UNISITS and expect to see numerous synergies from being able to leverage our shared technology and market channels over a larger addressable market," commented Mr. Xia. "With the continued support of the Chinese government, we anticipate China's intelligent transportation market will experience rapid growth during the next several years. By leveraging UNISITS' large presence in the expressway market with our leadership in the urban transportation market, we can better penetrate markets for our current products and services. Furthermore, this partnership will also help us to gain access to expressways real time traffic information, tapping China's expressway information services market."
About China TransInfo
China TransInfo, through its affiliate, China TransInfo Technology Group Co., Ltd., (the "Group Company") and the Group Company's PRC operating subsidiaries, is primarily focused on providing transportation information services and comprehensive solutions based on GIS technologies. The Company aims to become the largest transportation information products and comprehensive solutions provider, as well as the largest real time transportation information platform operator and provider in China. In addition, the Company is developing its transportation system to include Electronic Toll Collection (ETC) technology. As the co-formulator of several transportation technology national standards, the Company owns software copyrights for 92 software products and has won 5 of the 10 model cases sponsored by the PRC Ministry of Communications. The Company's affiliation with Peking University provides the Company access to the University's GeoGIS Research Laboratory, including 30 Ph.D. researchers. As a result, the Company is playing a key role in setting the standards for electronic transportation information solutions. For more information, please visit the Company's website at http://www.chinatransinfo.com .
Safe Harbor Statement
This press release contains certain statements that may include "forward looking statements". All statements other than statements of historical fact included herein are "forward-looking statements". These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
Company Contact:
Ms. Fan Zhou, Investor Relations Director
China TransInfo Technology Corp.
Tel: +86-10-8267-1299 x8033
Email: ir@ctfo.com
Investor Relations Contact:
Mr. Crocker Coulson, President
CCG Investor Relations
Tel: +1-646-213-1915 (NY office)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgirasia.com
