-- SC Autosportsto acquire 100% ownership of Northern Group—
JINHUA, CHINA-- (June 26, 2023) - Kandi Technologies Group, Inc. (“Kandi” or “the Company”) (NASDAQ GS: KNDI), today announced that on June 17, 2023, its wholly owned subsidiary SC Autosports, LLC (“SC Autosports”) entered into an Equity Transfer Agreement (the “Agreement”) to acquire Northern Group, Inc. (“Northern Group” or “NGI”) from its owner Olen Rice. NGI assists companies in improving their sales, distribution, and promotional strategies. This transaction is a milestone in Kandi's ongoing effort to strengthen its market presence and enhance its sales network in the North American market.
Over the past 23 plus years, Northern Group has specialized in providing sales and marketing support for major manufacturers and suppliers in the North American retail space. NGI is well known and respected as a key resource to several major national and international companies in multiple product categories, and as a valued partner to a broad group of North American “big box” retailers.
This strategic acquisition is expected to enable Kandi to leverage Northern Group's extensive experience and knowledge. With Northern Group’s focused teams supporting each major retailer, Kandi expects significant opportunities to grow its market share and penetration in the North American market to promote and distribute its electric vehicle products, with additional electrically-powered consumer product categories in development at this time. By joining forces, Kandi and Northern Group can combine their strengths, resources, and expertise to amplify their market reach, driving growth and profitability for both entities.
Johnny Tai, CEO of SC Autosports stated, “We are delighted to join forces with Olen and his experienced team at Northern Group. This strategic move perfectly aligns with our vision of expanding our distribution channels and reaching a broader customer base. With Northern Group’s proven track record in distribution channels and market promotion, we are confident that this collaboration will unlock new opportunities for Kandi.”
Olen Rice, Presidentand CEO of Northern Group, commented, “The opportunity to join Kandi’s SC Autosports team offers NGI a great chance to create value by bringing an innovative range of vehicles to more U.S. consumers. Our team at NGI looks forward to working with Kandi to build on the current momentum and to turn the Kandi brand into an industry leader in EV products as well as other electric/battery powered consumer products, by emphasizing Kandi’s vertical supply chain, and manufacturing expertise, and product quality.”
As SC Autosports integrates Northern Group into its operations, both companies are committed to maintaining the highest standards of customer satisfaction, innovation, and sustainability. Together, they are poised to capitalize on the global electrification trend, actively contributing to a cleaner and greener future.
Main Terms of the Agreement
SC Autosports will acquire 100% ownership of NGI for 3,951,368 restricted shares of Kandi common stock (the “Stock”) valued at $13 million based on the average closing price of the Company’s stock for the twenty trading days prior to June 1, 2023. The Stock will be held in escrow until the specific profit targets of $4.6 million, $5.25 million and $6 million are met over the next three years starting from June 1, 2023, respectively. Completion of certain targets in any given year will vest portions of the Stock held. If Northern Group fails to meet any profit targets, the number of Stock to be vested will be adjusted based on the achieved pretax income percentage for that period, and any losses incurred will be assumed by Northern Group’s previous owner Olen Rice. Failure to achieve the first year profit target could result in a termination of the transaction. Main details of the Agreement can be found in the Current Report on Form 8-K filed on June 23, 2023 with the Securities and Exchange Commission.
