Benzinga | Feb 18, 2021 08:43AM EST

East Stone Acquisition Corporation Announces Business Combination With JHD Holdings (Cayman) Limited

Burlington, MA and Beijing, China, Feb. 18, 2021 (GLOBE NEWSWIRE) -- East Stone Acquisition Corporation (NASDAQ:ESSC) ("East Stone"), a publicly traded special purpose acquisition company ("SPAC"), and JHD Holdings (Cayman) Limited, an innovative merchant enablement services platform in lower-tier cities in China ("JHD" or the "Company"), operating in China under the brand Ji Hui Duo(r)(""), announced today that they have entered into a definitive business combination agreement. Upon closing of the transaction, the combined company will be named JHD Technologies Limited, and seeks to be listed on the Nasdaq Stock Market. The terms of the business combination agreement provide that at closing the public company ("Pubco") resulting from the transaction will issue shares to the selling parties with an aggregate value equal to one billion U.S. dollars ($1,000,000,000), subject to adjustments for closing cash, closing debt, and certain excess unpaid expenses. 10% of the Pubco shares to be issued to the selling parties at closing will be subject to an earn-out and escrowed under the terms of the agreement.

JHD is an online and offline merchant enablement services platform that provides almost 90,000 independent retailers, in five provinces, with a full suite of services and technologies, including Point-of-Sale (POS), supply chain and logistics, and fintech/payment capability. To enable financial inclusion of communities that are significantly underbanked, JHD's platform has already enabled 3,000 outlets to become licensed rural area financial stations, enabling established banks to extend their branch network to serve more consumers. By supplying the partner stores with reliable and timely delivery of branded consumer products, JHD provides a reliable supply chain to the stores.

JHD targets lower-tier cities and emerging areas in China, which represent a total population of over 550 million people who spend over $900 billion on food and household items each year, mostly in the over six million independent retailers that service these regions.

Commenting on today's announcement, JHD's founder and Chairman, Alan Clingman, said, "In 2016 we started Ji Hui Duo ""with the mission of building a technology driven platform and the accompanying service infrastructure to support financial inclusion in the world's largest emerging market. We believe the highly fragmented, lower tier economy of China represents one of the biggest potential growth stories of this decade and we are in the middle of it."

"In JHD we have found a truly exciting company operating in a large, dispersed and underserved addressable market with hundreds of millions of potential customers." said Xiaoma "Sherman" Lu, Chief Executive Officer of East Stone.

The boards of directors for both JHD and East Stone have approved the proposed business combination, which is expected to be completed by the end of third quarter of 2021, subject to, among other things, the approval by East Stone's shareholders of the business combination, satisfaction of the conditions stated in the definitive agreement and other customary closing conditions, including that the U.S. Securities and Exchange Commission (the "SEC") completes its review of the proxy statement/prospectus, the receipt of certain regulatory approvals, and approval by The Nasdaq Stock Market to list the securities of the combined company.

JHD's Founder and Chairman of the board, Mr. Clingman will continue leading the company. Mr. Lu, East Stone's Chief Executive Officer will join the combined company as vice-chairman and president.

Concurrently with the announcement of this transaction, East Stone is terminating its previously announced business combination agreement with Ufin Holdings Limited.