Mogu Inc (NYSE:MOGU) rose sharply in Tuesday trading after the company enetered into definitive agreements to increase ownership of Hangzhou Ruisha.
Mogu, a leading KOL-driven online fashion and lifestyle destination in China, announced Monday hat Hangzhou Juangua Network Co., Ltd. a consolidated affiliated entity of the Company, has entered into definitive agreements with Hangzhou Ruisha Technology Co., Ltd., Hangzhou Ruisha’s existing shareholder and Hangzhou Ruisha’s founder, to increase and obtain controlling equity interests in Hangzhou Ruisha.
Under the definitive agreements, Hangzhou Juangua will purchase equity interests from the existing shareholder of Hangzhou Ruisha and subscribe for additional equity interests in Hangzhou Ruisha, at an aggregate consideration of RMB50 million in cash. MOGU will beneficially own 59.62% equity interests in Hangzhou Ruisha at the closing of the transactions. The transactions are subject to customary closing conditions.
Hangzhou Ruisha is committed to providing brands with one-stop and customized services for full-domain operations, including a wide variety of operational services, data platforms and other software services, as well as value-added services such as traffic placement.
CEO Qi Chen commented, "The investment in Hangzhou Ruisha represents continuingly expanded and utilized capabilities of MOGU to provide services for business customers.
"Hangzhou Ruisha’s solutions are increasingly sought after by brands which would like to embrace online growth in spite of limited technical and operational experiences. This investment is an important step in MOGU’s development towards a more extensive ecosystem for live video broadcast e-commerce."
MOGU shares opened Tuesday gained 12 cents, or 11.7%, to $1.15.
