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Iao Kun Group Closes Acquisition of Majority Stake in Chinese B-to-B Ag Trading Platform.

M2 EQUITYBITES-March 1, 2017-Iao Kun Group Closes Acquisition of Majority Stake in Chinese B-to-B Ag Trading Platform


1 March 2017 - Macau-based gaming company Iao Kun Group Holding Co Ltd. (NASDAQ: IKGH) has closed the acquisition of 51% of Chinese technology holding company Jia-Heng Industrial Ltd., the group said.

Jia-Heng Industrial is the holding company of Guangzhou LiNiu Network Technology Co. Ltd. a software technology development company that is currently developing an electronic B2C trading platform focused on the Chinese agricultural industry.

Iao Kun Group said this is part of a plan to transform the company's overall strategy and begin to focus its efforts on the Chinese technology industry.

As consideration for the acquisition, IKGH will issue 12.484m ordinary shares (USD 3.87m) upon the transaction's closing, as well as cash consideration that is contingent upon LiNiu Network achieving after-tax income targets.

LiNiu Network is currently internally testing its LiNiu B2C electronic trading platform, which will be focused on the Chinese agricultural industry; in particular, helping to create solutions with respect to the "Three Rural Issues" (agriculture / rural / farmers) to help facilitate the future development and growth of the 900m people in China tied to the agricultural industry.

The Chinese government has recently focused on encouraging farmers and the rural community to enhance their businesses through new opportunities and investment.

Through its e-commerce platform, the LiNiu Network will cover both the production and service businesses included in "Three Rural," including agricultural production, information/factors/tools, agricultural sideline products, ecotourism, agricultural finance and market information.

Scheduled to officially launch in the first half of 2017, LiNiu Network's directors Wang Shun Yang and Luo Guo Rui have already identified and connected with over 10,000 suppliers, of which more than 1,200 have already signed a letter of intent to join the platform upon launch.

LiNiu Network expects to generate revenue on the platform through commissions, advertising and guarantee deposits.

Iao Kun Group Holding is a holding company that currently participates in the promotion of a VIP gaming room at the city of Dreams Macau in Cotai.

In February 2017, IKGH announced its intent to diversify into non-gaming assets with the planned acquisition of a majority interest of Guangzhou LiNiu Network Technology Co. Ltd., which is developing an electronic trading platform focused on the Chinese agricultural industry.

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Publication:M2 EquityBites (EQB)
Date:Mar 1, 2017
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