China Boton Sells Bubblemon Vape Brand to RELX Founder

On July 10th, Hong Kong-listed company China Boton published a disclosure notice, "Disclosure and Connected Transaction - Sale of Subsidiary", announcing information regarding the sale of its subsidiary's equity.

According to the announcement, the company has signed a sale agreement with the target company, Boton, Han, and the buyer. Upon completion of the transaction, the buyer and Han Holding SPV will respectively hold 81% and 19% of the target company's equity.

As per the sale agreement:

(a) Boton Holding SPV agrees to sell, and the buyer agrees to purchase 5,100 shares of the target (equivalent to 51% of the target company's equity) at a price of CNY 100,000,000 ($13.84 million); 

(b) Han Holding SPV agrees to sell, and the buyer agrees to purchase 3,000 shares of the target (equivalent to 30% of the target company's equity) at a price of CNY 58,823,529 ($8.14 million). As of the sale agreement date, the target company is a wholly-owned investment holding company of Han Holding SPV. The target group will undergo a Korean company reorganization prior to the completion of the sale transaction.

The Korean company reorganization will be carried out by Boton Holding SPV, Han side, and the target group. After the reorganization, Boton Holding SPV and Han Holding SPV will respectively hold 51% and 49% of the target company's equity, making the Korean target company a wholly-owned subsidiary of the target company. The significant parties involved in the announcement include representatives of Boton Holding SPV, Han Holding SPV, and the related shareholders.

Background of the Parties Involved

China Boton, as stated in the announcement, is an investment holding limited company registered in the Cayman Islands, mainly engaged in the research and development, production, trading, and sale of extracts, essences, and spices. The company is also involved in the design and manufacture of high-quality e-cigarettes and related products.

The company being sold, called Mons, is a company registered in South Korea, primarily in the trade of its popular e-cigarette brand, Bubblemon, products.

As per the annual financial data up to December 31, 2021, and 2022, Mons' pre-tax net income was CNY 32,000,000 (USD $4.43 million) and CNY 22,700,000 (USD $3.14 million) respectively, with post-tax net income of CNY 30,200,000 (USD $4.18 million) and CNY 19,100,000 (USD $2.64 million) respectively. The audited net asset value was approximately CNY 45,500,000 (USD $6.3 million) and CNY 67,000,000 (USD $9.27 million) respectively.

The buyer is an investment holding limited company registered under the laws of the British Virgin Islands and a wholly-owned subsidiary of Sunnyheart Inc. Sunnyheart Inc. is a limited liability company registered under the laws of the Cayman Islands, primarily engaged in the sale of e-cigarettes. According to the directors, based on the information provided by Sunnyheart Inc., the ultimate beneficial owner of Sunnyheart Inc. is Ms. Wang Ying (or also known as Kate Wang, CEO & Founder of Relx Technology), who holds 50% voting rights of Sunnyheart Inc. and is the sole director of Sunnyheart Inc.

Bubblemon (Huizhou Bubblemon Technology Co., Ltd.) is a wholly-owned subsidiary of China Boton Group, established in May 2021 in the High-tech Industrial Park of Huicheng District, Huizhou City. The company produces disposable e-cigarettes under the BUBBLEMON and MONS brands.

Previously, BUBBLEMON co-branded with Relx in the UK market.