China’s largest e-commerce site JD.com and online security software company Qihoo 360 have acquired a combined stake worth HK$491 million ($63 million) in Colour Life Services Group, the country’s largest property management firm by residential floor space.
In a disclosure to the Hong Kong exchange, Colour Life said JD.com has agreed to subscribe to 71.15 million new shares at HK$5.22 per share, for a total of HK$371.4 million ($47.6 million).
The acquisition gives JD.com a 5 per cent stake in Colour Life, which provides tech-enabled property management to residents across 268 Chinese cities in seven major regions.
The transaction will be carried out by Volga Innovation Limited, an indirect wholly-owned subsidiary of JD.com.
Colour Life also entered into a subscription agreement with Beijing-based Qihoo 360, the Chinese mobile security software maker, for the subscription of approximately 23 million shares at HK$5.22 per share, for a total of HK$120 million ($15.3 million).
The agreement was signed by Qifei International Development Co, an indirect wholly-owned subsidiary of Qihoo 360.
When the deal is completed, Qihoo 360 will raise its stake in Colour Life from 1.54 per cent to 3.05 per cent, according to the disclosure. Qihoo 360 is controlled by Zhou Hongyi, a non-executive director at Colour Life.
Fantasia Holdings Group will continue to hold a majority stake in the company at 51.69 per cent while Splendid Fortune Enterprises will have a 15.25 per cent shareholding.
Colour Life said its agreement with JD.com will enable it to raise funds and broaden its capital base. It also fosters greater cooperation with JD.com in its e-commerce, logistics, finance, and technology businesses.
Its deal with Qihoo 360 will expand the two companies’ cooperation in technologies, such as core security capacity, big data, IoT, and artificial intelligence, Colour Life said.
The deal will “effectively enhance the brand recognition and influence of Qihoo 360 in urban and community security, laying a solid foundation for establishing urban security brain and creating macro-security industrial ecosphere”.
Shenzhen-headquartered Colour Life Services Group has three main businesses – property management, community leasing, and engineering services. It focuses on providing an integrated property management platform, such as smart logistics, intelligent building management, and community services.
A spin-off of Shenzhen-based property developer Fantasia Holdings, Colour Life listed on the Hong Kong bourse in 2014, becoming the first mainland property management company with a presence on the main share-trading board.
In its annual report, Colour Life said it made a revenue of 3.6 billion yuan ($523.3 million) in 2018, up 74.5 per cent year-on-year, which brought in 485 million yuan ($15.3 million) as net profit, up 35.1 per cent year-on-year.