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Zindart Limited to Acquire Specialty Book and Packaging Manufacturer.



HONG KONG--(BUSINESS WIRE)--Nov. 10, 1997--Zindart Limited (NASDAQ NASDAQ
 in full National Association of Securities Dealers Automated Quotations

U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on
:ZNDTY) announced today that it has entered into a letter of intent to acquire Hua Yang Printing Co. Limited ("Hua Yang"), a leading printer and manufacturer of hand-assembled "pop-up" and novelty books and also a printer of packaging and paper products, through an acquisition of the stock of its parent company.

The total consideration for the acquisition is (US) $35 million in cash and 1,000,000 new Zindart shares.

The transaction is expected to close on Jan. 1, 1998; however, 333,333 shares of the 1,000,000 shares will be issuable upon the completion of the fiscal 1999 audit and subject to Hua Yang earning an aggregate of approximately $15.6 million in earnings before interest, taxes, and depreciation Earnings before interest, taxes, and depreciation (EBITD)

A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes.
 and amortization in the two fiscal years ending March 31, 1999.

Zindart is negotiating a $35 million syndicated revolving credit Revolving Credit

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs.
 facility through Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. , which is additionally serving as a financial advisor to Zindart in connection with the acquisition, to finance the acquisition and to provide working capital.

Feather Fok, Chief Operating Officer Chief Operating Officer (COO)

The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president.
 and CFO See Chief Financial Officer.  of Zindart, stated, "Like Zindart, Hua Yang has a long history of providing its international customers with strong engineering and turn-key support and excellence in the hand-assembly by a skilled workforce. We have an added advantage of knowing Hua Yang well, as it supplies box packaging to our core customers Hallmark and Mattel.

"We are already exploring cooperative marketing initiatives and cross-selling opportunities, as well as possible operating economies."

With headquarters in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , Hua Yang has production facilities in Shenzhen, PRC, approximately 30 miles from Hong Kong and employs a workforce of approximately 2,500. Approximately 53% of Hua Yang's fiscal 1997's sales were attributable to sales of hand-assembled books, consisting of board books, pop-up books and novelty books produced for many of the world's leading publishing houses and independent concept packagers.

Novelty books incorporate electronic devices, special materials or features, and Hua Yang's creative staff employs turnkey services to attract customers. Hua Yang also has been in the packaging box business since the 1960s, and concentrates in the area of high value-added packaging boxes that involve complicated printing techniques and hand assembly and command higher gross margins.

Hua Yang's parent is a privately held company privately held company

A firm whose shares are held within a relatively small circle of owners and are not traded publicly.
 whose largest shareholders are also principal shareholders of Zindart, including the ChinaVest IV Funds and certain limited partnerships managed by Advent International Advent International - a long-established and leading global private equity investor Background
Advent was founded in 1984 by Peter Brooke and Clint Harris to focus on international private equity investing.
 Corporation. An independent committee of the Board of Directors of Zindart has been established to review the acquisition accordingly and is being separately advised by Van Kasper & Company.

Hua Yang reported sales of approximately $33.5 million in its fiscal year ended March 31, 1997.

Consummation of the transaction is subject to customary closing conditions including, without limitation, (a) the execution of definitive agreements relating to the transaction, (b) approval of the issuance of Zindart Ordinary Shares by the shareholders of Zindart, (c) satisfactory completion of Zindart's due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired.  review of Hua Yang, (d) receipt by Zindart of a "fairness opinion Fairness Opinion

A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition.

Notes:
A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition.
" from Van Kasper & Company, (e) completion of transaction financing and (f) the absence of any material adverse change to Hua Yang's business, financial condition, shareholders' equity Shareholders' Equity

A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares.
, financial performance or prospects.

Zindart, which was founded in 1978, is a Hong Kong-based manufacturer of high-quality detailed metal die-cast and plastic molded collectibles, ornaments, and toys. Its major customers are located in the United States. Zindart reported its results for the six months ended Sept. 30, 1997 on Nov. 4, 1997.

Certain statements in this release are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to materially differ from those anticipated. Risks and uncertainties include, in addition to those discussed above and without limitation, changes in market demand for the company's products, changes in economic conditions, construction delays with respect to the company's new facilities, logistical problems in consolidation production at a single facility and other risks described in the Form 20-F for the fiscal year ended March 31, 1997. The company undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances.

Zindart prepares its financial results in U.S. dollars in accordance with U.S. GAAP GAAP

See: Generally Accepted Accounting Principles


GAAP

See generally accepted accounting principles (GAAP).
.

CONTACT: Zindart Limited

Feather Fok, 011/852-2666-1711

featherf@zindart.com

or

William Dunk Partners Inc.

Deborah Passik, 919/929-4100
COPYRIGHT 1997 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Nov 10, 1997
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