New Huo Technology Holdings Limited (stock code: 1611.HK) has announced its intention to acquire a majority stake in BitTrade, a licensed cryptocurrency exchange based in Japan. This strategic move aims to significantly expand the company's footprint in the global digital asset market.
The total consideration for the acquisition exceeds $33.23 million. Upon completion, New Huo Technology will indirectly hold 92.31% of BitTrade's issued share capital.
Acquisition Structure and Financial Details
The acquisition is structured through two primary transactions:
- New Huo Technology plans to acquire 100% of the issued share capital of Avenir Asset Holding for approximately $30.46 million. Avenir Asset Holding indirectly holds about 84.62% of BitTrade's issued share capital.
- Separately, the company will acquire approximately 7.69% of BitTrade's issued share capital directly from Goldenway for about $2.77 million.
The company will settle both transactions by issuing new shares. The total number of new shares to be issued will represent approximately 20.33% of the company's enlarged share capital. The issuance price is set at HK$2.18 per share, representing a premium of roughly 14.14% over the closing price on Friday, August 16.
To facilitate this share issuance and provide flexibility for future investments, the Board of Directors has proposed an increase to the company's authorized share capital. The proposal is to add 200 million new shares, raising the total authorized share capital from HK$500,000 (divided into 500 million shares) to HK$700,000 (divided into 700 million shares). These new shares will carry equal rights to existing shares once issued.
A special general meeting of shareholders will be convened to consider and approve the necessary agreements and resolutions related to the acquisition and the increase in authorized share capital.
Strategic Importance of BitTrade
BitTrade is a significant player in Japan's tightly regulated cryptocurrency landscape. Established in 2016, it holds two critical licenses from Japan's Financial Services Agency (FSA):
- Cryptocurrency Exchange Business License (Kanto Finance Bureau Director No. 00007)
- Type 1 Financial Instruments Business Operator License (Kanto Finance Bureau Director (Kin-sho) No. 3295)
These licenses allow BitTrade to operate a compliant cryptocurrency exchange and offer financial instruments services. Furthermore, BitTrade is a member of all three major self-regulatory associations officially recognized by the FSA. These associations play a vital role in formulating and enforcing rules and standards for the Japanese crypto market and promoting the development of security token offerings (STOs).
BitTrade is one of the first 29 registered cryptocurrency exchange operators in Japan and currently supports the second-highest number of crypto assets in the country.
Expected Synergies and Future Plans
Post-acquisition, Avenir Asset Holding and BitTrade will become indirect wholly-owned subsidiaries of New Huo Technology, and their financials will be consolidated into the group's statements.
This acquisition presents a substantial opportunity for New Huo Technology to enter the Japanese crypto exchange market through a fully compliant and established platform. The company plans to leverage its existing technological expertise and resources to enhance BitTrade's market position and expand its compliant business operations within Japan and into other regions. 👉 Explore advanced digital asset management strategies
Additionally, the acquisition is expected to complement and strengthen New Huo Technology's existing asset management services, boosting the group's overall competitiveness in the rapidly evolving cryptocurrency sector.
Frequently Asked Questions
What is New Huo Technology acquiring?
New Huo Technology is acquiring a 92.31% majority stake in BitTrade, a licensed Japanese cryptocurrency exchange. The total value of the deal is over $33.23 million.
Why is BitTrade a significant acquisition target?
BitTrade holds valuable licenses from Japan's Financial Services Agency (FSA) and is a member of key self-regulatory bodies. It is one of Japan's earliest and most compliant crypto exchanges, making it a strategic gateway into the regulated Japanese digital asset market.
How will New Huo Technology pay for this acquisition?
The company will pay for the acquisition entirely by issuing new shares, not with cash. This means the sellers will receive newly created shares of New Huo Technology as payment.
What are the benefits for New Huo Technology after the acquisition?
The acquisition provides New Huo Technology with immediate access to a licensed Japanese exchange, allowing it to expand its global presence, offer a wider range of compliant services, and enhance its asset management capabilities.
What happens to BitTrade after the acquisition is complete?
BitTrade will become an indirect subsidiary of New Huo Technology. It will continue its operations but will be integrated into the larger group, benefiting from New Huo's technology and resources to grow its business.
Is this acquisition finalized?
No, the acquisition is still subject to the fulfillment of certain conditions outlined in the agreements and requires approval from shareholders at an upcoming special general meeting.