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China: Future FinTech to acquire 51% stake in supply chain software business

Future Fintech Group Inc. signs an equity acquisition term sheet to acquire 51% of the equity of Shanghai Dianfa Internet Technology Co., Ltd.

Future Fintech Group Inc., a blockchain-based e-commerce business and a FinTech service provider, has signed an equity acquisition term sheet to acquire a 51% stake in Shanghai Danfia Internet Technology Co., Ltd. (“Dianfa Technology”). Think about a term sheet as a proposed transaction subject to definitive documentation and is non-binding except for its ‘Exclusive Period’ and ‘Confidentiality’; and ‘Governing Law’ sections.

According to the Term Sheet, the blockchain-based e-commerce firm plans to acquire 51% of the equity of Dianfa Technology at a purchase price of US$ 2,762,730.  Out of the purchase price, US$ 928,650 will be paid in cash as a capital investment in Dianfa Technology, and US$ 1,834,080 will be paid in shares of FTFT common stock to the selling shareholders of Dianfa Technology.

Dianfa Technology provides digital management services and high-frequency small loan assistance services to micro, small and medium-sized businesses and their suppliers based on its innovative smart retail SaaS supply chain system.

Dianfa Technology utilizes financial technology capabilities such as mobile Internet, big data, artificial intelligence, cloud computing, and blockchain analytics to help financial institutions provide low-interest collateral-free revolving credit products to micro and small merchants across the entire retail industry business chain to meet their funding needs. These capital needs are often of a ‘short, small, frequent and urgent’ variety and are essential in supporting the operational needs of microbusinesses and small merchants.

Shanchun Huang, CEO of Future FinTech, commented, “We estimate that there are millions of microbusinesses in China which represents a tremendous opportunity for digital management, lending, and payment processing companies such as Dianfa Technology. Further, we anticipate that this potential acquisition will enhance our competitive advantages as well as create important synergies with our existing capabilities in supply chain finance.”

“In addition, we believe that FTFT’s strong blockchain development capabilities and rich application experience will enable us to evolve Dianfa Technology’s current smart retail SaaS supply chain system to a next business model architecture. With our increasing geographical reach, we foresee the potential to realize decentralized high-frequency small transactions for small and medium-sized businesses across the globe,” continued CEO Huang.

“Our goal is to become a leading financial technology company and provide an array of individual and business customers with digital inclusive financial services and, in doing so, to maximize returns to our shareholders,” concluded CEO Huang.

The acquisition will be subject to legal and financial due diligence on the part of the Company. Through this acquisition, FTFT plans to enter the key supply chain finance business of small and medium-sized enterprises (SMEs) and the microfinance sector since these entities can often not access bank loans as larger businesses can in China.

FTFT plans to develop a financial ecosystem that includes financial and lending institutions, merchants, retail businesses, and other supply-side services embedded with financial technology and communications. FTFT plans to create a highly evolved and efficient platform that optimizes capital flows for SMEs and microfinance companies.

China in focus

GDP: $14.723 trillion in 2020 compared to $14.28 trillion in 2019

Population: 1.402 billion in 2020 compared to 1.398 billion in 2019

GDP per capita: $10.925 in 2020 compared to $11,417 in 2019