Benzinga | Jan 5, 2022 06:04AM EST

Quhuo To Acquire Remaining 45.78% Equity Interest In Lailai Information Technology For RMB69.1M

Quhuo Limited (NASDAQ:QH) ("Quhuo," the "Company," "we" or "our"), a leading tech-enabled workforce operational solution platform in China, today announced that it has entered into a definitive investment agreement (the "Agreement") to acquire the remaining 45.78% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd. ("Lailai"), its subsidiary and an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs, for a total consideration of approximately RMB69.1 million in the form of the Company's securities. Upon completion of the transaction, Quhuo will own 100% equity interest in Lailai.

According to the Agreement, the Company agreed to issue 9,000,000 Class A ordinary shares of the Company ("Consideration Shares") to the selling shareholder of Lailai under a private placement pursuant to an exemption or exclusion from the registration requirements under the Securities Act of 1933. The Consideration Shares will be subject to relevant restrictions on transfer.

The parties expect to close the transaction in the first quarter of 2022, subject to the relevant corporate approvals and customary closing conditions. There is no assurance that any such procedures or transactions will be completed in a timely manner.

Leslie Yu, Chairman and Chief Executive Officer of the Company, commented, "Over the past year after we invested in the business, Lailai has been quickly integrated into Quhuo's platform. For the first three quarters of 2021, revenues from our housekeeping and accommodation solutions increased almost 13 times year-over-year. Looking ahead, I believe the full acquisition of Lailai is of great strategic significance to our future development. Leveraging the standardized service products and our strong managerial experience accumulated in the past decade serving various business clients, we have decided to expand our business to the 2-Family (B2F) sector. We already built service stations around communities and are cooperating with property management companies to provide services directly to households in the communities by utilizing our existing workforce and management network."

Mr. Yu continued, "In the past few years, Lailai built up a large pool of hotel service personnel, who will become an important resource for our 2-Family service. It also formed a joint venture with Gemeite Technology, a community-focused service company with business connections with over 10,000 property management companies, to provide services and products catering to various family needs. In addition, our nationwide on-demand delivery network which now covers more than 100 cities and more than 1,000 business circles gives us a strong position to quickly implement our 2-Family initiative. Overall, we are constantly diversifying our service offerings and expanding the size of addressable markets. We believe that this acquisition will accelerate the pace as we move forward."

Lailai is an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs. Leveraging its one-stop hotel workforce outsourcing platform powered by advanced mobile and SaaS technologies, Lailai has served over 1,300 hotels with over 35,000 active workers across 25 provinces in China, including some well-known brands such as Hilton Hotels and Resorts, Kingkey Group, Marriott International, and Kempinski Hotels. Quhuo acquired a majority equity interest in Lailai in November 2020.