China Fortune-Tech Capital Co., Ltd entered into a term sheet to acquire semiconductor equipment business from Manufacturing Integration Technology Ltd (SGX:M11) on January 8, 2018. China Fortune-Tech Capital Co., Ltd and IC Spaces Holdings Company Ltd entered into a conditional share purchase agreement to acquire MIT Semiconductor Pte. Ltd from Manufacturing Integration Technology Ltd for SGD 92.5 million on July 18, 2018. Under the terms, China Fortune-Tech Capital Co., Ltd and IC Spaces Holdings Company Ltd will acquire 50% stake each in MIT Semiconductor. As of October 8, 2018, Ningbo Zhongxin IC Industrial Investment Partnership (Limited Partnership), CFT High Tech Investment Fund (Limited Partnership) and Shanghai Juyuanjuxin Semiconductor Industrial Equity Investment Fund Center (Limited Partnership), funds affiliated with China Fortune-Tech Capital Co., Ltd, were replaced as additional buyers to acquire MIT Semiconductor Pte. Ltd. The consideration payable in cash is to be based on a price of not more than 13 times of the net profit of semiconductor equipment business on a consolidated basis for the financial year ended December 31, 2017 and on a cash free and debt free basis. It will exclude the cash balances at closing and its investment properties. Under the terms of the agreement, the total estimated consideration is SGD 84.5 million (with a reduced sale price of SGD 67.6 million), subject to agreed adjustments. Of the total consideration, 80% of the consideration plus SGD 8 million of cash balance will be paid to Manufacturing Integration Technology Ltd on completion. The balance 20% will be retained in escrow and the first payment of 10% will be released after March 31, 2019 based on the audit on target group for the purpose of determining the adjustment amount and the second payment will be released after 18 months from completion. The total indebtedness of the Target group, which amounted to approximately SGD 0.8 million as at November 30, 2018, is entirely owed by MIT Semiconductor to Manufacturing Integration Technology Ltd. Such amount will be fully repaid with collections from trade receivables, be waived or be capitalized prior to the base date. According to the terms of the consideration, Manufacturing Integration Technology Ltd will undertake a restructuring exercise such that its assets relating to and the activities currently undertaken by it in connection with that of semiconductor equipment business will be transferred to MIT Semiconductor Pte. Ltd incorporated by Manufacturing Integration Technology Ltd. Consequently, i.PAC Manufacturing Pte Ltd, Generic Power Pte Ltd and MIT Semiconductor Pte. Ltd will be the target companies. A definitive agreement will be entered within 3 months from the date of the term sheet. Following completion, i.PAC Manufacturing Pte Ltd, Generic Power Pte Ltd and MIT Semiconductor Pte. Ltd will cease to be subsidiaries of Manufacturing Integration Technology Ltd. In the event that Manufacturing Integration Technology fails to obtain shareholders’ approval, Manufacturing Integration Technology shall pay to the purchasers a sum of SGD 0.2 million as compensation for expenses incurred in association with the transaction. It is envisaged that, upon completion, Kwong Kim Mone will be re-designated as Non-Executive Chairman of Manufacturing Integration Technology Ltd. The transaction is subject to entering into definitive agreements, due diligence, approval of shareholders and Board of Manufacturing Integration Technology Ltd and the undertaking of restructuring exercise. The transaction is also subject to approvals from antitrust, Ministry of Commerce, National Development and Reform Commission, and State Administration of Foreign Exchange of PRC, Manufacturing Integration Technology Ltd shall have caused the MIT Semiconductor Pte. Ltd and its subsidiaries to fully repay and discharge the outstanding loans owed to Manufacturing Integration Technology Ltd as of December 31, 2017, Manufacturing Integration Technology Ltd shall have caused the certain key employees of the MIT Semiconductor group to sign a three-year retention employment contract with the MIT Semiconductor group. As of April 4, 2018, a deed of undertaking was entered pursuant to which the exclusivity period and the expiry date of the term sheet got extended for 2 months, i.e. from April 7, 2018 to June 7, 2018. As of June 7, 2018, a second deed of undertaking was entered pursuant to which the exclusivity period and the expiry date of the term sheet was extended from June 7, 2018 to July 7, 2018. As of July 5, 2018, a third deed of undertaking was entered pursuant to which the exclusivity period and the expiry date of the term sheet was extended from July 7, 2018 to July 23, 2018. On November 30, 2018, Manufacturing Integration Technology Ltd completed its restructuring exercise. As of January 2, 2019, the independent Directors of Manufacturing Integration Technology Ltd recommended its shareholders to vote in favor of the transaction. Extra-ordinary general meeting of the shareholders of Manufacturing Integration Technology Ltd will be held on January 17, 2019. As of January 17, 2019, the transaction is approved by the shareholders of Manufacturing Integration Technology Ltd. If any of the conditions precedent is not fulfilled or waived by January 18, 2019, being the date falling 6 months from the agreement date, or such later date as may be agreed in writing by the parties, the agreement may be terminated. Completion of the transaction shall take place within five business days after the satisfaction or waiver of all the conditions precedent. As of January 4, 2019, the long stop date referred to and defined in the share purchase agreement is extended from January 18, 2019 to February 28, 2019. Manufacturing Integration Technology Ltd intends to return of proceeds from the divestment to shareholders by way of a special dividend or capital reduction. Proceeds may be deposited with banks and/or financial institutions, or used for any purpose on a short-term basis, as the Board of Manufacturing Integration Technology may deem appropriate in the interests of the group. Alex Tan and Karen Soh of ZICO Capital Pte. Ltd. acted as independent financial advisors to the independent Directors of Manufacturing Integration Technology Ltd. Manufacturing Integration Technology Ltd will also pay a 3.4% commission to Infinity International Trade Co Ltd for providing business consultancy services and a 1.6% commission to Forte Investments Corp for providing technical consultancy services in relation to the transaction.