ZDS has successfully arranged as the sole FA a deal involving deal signing between Tsinghua Holdings Co., Ltd. (“Tsinghua Holdings”) , Tus Service Co., Ltd. (“Tus Service”) with other 2 strategic investors and Sound Group Co., Ltd. (“Sound Group”), for acquiring the latter’s 29.8% shareholding in Sound Environmental Resources Co., Ltd. (“Sound Environmental Resources”, ticker: 000826). Sound Environmental Resources stocks have resumed trading. The deal is so far China’s biggest acquisition in environmental sector, and is a historical landmark in China’s environmental sector.

In the deal, Sound Group, the controlling shareholder of Sound Environmental Resources, sold to Tus Service, Tsinghua Holdings, Tsinghua Holdings Assets, and Jinxin Huachuang respectively 20%, 6%, 3%, and 0.8% shares, for a total consideration of CNY7 bn. After the deal, Tus Service becomes the biggest shareholder in Sound Environmental Resources, and the actual controlling shareholder of Sound Environmental Resources was changed to Tsinghua Holdings.

As Tsinghua University’s wholly State-owned company and empowered operator for State-owned assets, Tsinghua Holdings operates and manages all tech enterprises of Tsinghua University, and is platform and incubator of Tsinghua University for tech R&D commercialization. According to Tsinghua Holding’s business strategy, and with view of State industry transition and upgrade, Tsinghua Holdings will make major movements in environmental sector. Leveraging the listco to meaningfully consolidate environmental resources and to achieve industry synergy, Tsinghua Holdings has added the major building blocks to its environmental sector.

Tus Service is a large hi-tech company capable of full supply-chain incubation steered and founded by Tus-Holdings. It is committed to becoming the Chinese leader and global model in tech service sector. Today, Tus Service covers Tus-Holdings’ existing tech service assets. The acquisition of Unisplendor Guhan is in line with Tus Service’s business strategy. The acquisition strengthens Tus Service’s ability for ‘extended incubation through MA’, further augments Tus Service’s core competence, and builds a leading tech service enterprise having strong tech innovation ability and synergized innovation ability.

The share sales will help Tsinghua Holdings in future for its sector-wise capital operation, build diversified sources of financing, enhances financing efficiency, accelerates business optimization and upgrade, promotes a sustained and healthy development, and ultimately achieves the holistic tech service landscape designed by Tsinghua.

As a full supply-chain environmental service provider, Sound Environmental Resources is China’s leading player in solid waste treatment, and has committed for a long time to the solid waste recycling-for-resources and the sustainable development of environmental resources. It is currently a leading solid waste treatment listco on A-share market.

The deal amount is c. CNY7bn, which set a new record in China’s environmental sector MA market. The deal fully manifested Tsinghua Holding’s model of environmental industry consolidation (incubation + investment + MA). The controlling of Sound Environmental Resources will boost Tsinghua Holding’s position in environmental sector, and promote tech innovation and industry upgrade of China’s environmental sector. Tsinghua Holdings and Sound Environmental Resources will fully leverage their advantages. With Tsinghua Holdings strong position in resources, brand, and management, and with Sound Environmental Resources’ business model innovation, teamwork, and market position in environmental sector, the two will achieve strong-strong partnership to build large environmental platform. The deal will definitely have extremely far-reaching impact to the history of China’s environmental sector.

ZDS is the sole FA in the deal for Tsinghua Holdings and Tus Service. The project team set very tight timetable right after the field-entrance and assisted the client to quickly complete deal structure design, deal negotiation and signing, SASAC communication, and stock exchange communication. The team successfully completed deal signing and listco trade resumption, which was highly recognized by the client’s Management and won high market reputation for ZDS. The success not only showcased ZDS’ strong execution ability in large MA deals, but also tightened strategy partnership between ZDS securities and Tsinghua University’s asset platform.