LeTV parent plans more M&A deals

Updated: 2015-08-21 10:50


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The Chinese conglomerate behind LeTV Holdings Co Ltd is considering at least 15 deals after hiring former Bank of America Corp dealmaker Winston Cheng to lead acquisitions and help expansion in the United States and Southeast Asia.

Le Holdings (Beijing) Co, which controls LeTV businesses spanning smartphones and a sports website seeking a $3 billion valuation, is in talks with some targets and considering fundraising, said Cheng, head of corporate finance. It is also considering incentives to retain staff.

Cheng's arrival in August is part of its efforts to adopt practices in line with global technology firms to help its expansion outside of China after parts of its business gained backing from outside investors, including billionaire Jack Ma. That will partly come about through the recruitment of more Wall Street bankers, lawyers and auditors to beef up its investment team of 28 people, Cheng said in an interview.

One of the former technology investment banker's more pressing tasks is to come up with ways to bankroll the seven business units of the company that also includes electric cars.

"For my responsibilities, a lot of it will be how we most efficiently find the financing to fuel our growth," he said on Tuesday. "We need to expand and build our team, especially since we have international aspirations."

Cheng follows several other bankers who have jumped ship for Chinese startups. Jean Liu, a former Goldman Sachs Group Inc managing director, joined Chinese taxi-hailing application Didi Taxi. Shou Zi Chew, who was a partner at Russian investment firm DST, joined Xiaomi Corp as chief financial officer. Alex Yao, JPMorgan Chase & Co's China Internet research head, joined Cheetah Mobile Inc as head of mergers and acquisitions.

LeTV is competing with other Chinese Internet firms not just in a race for talent, but also capital. Its sports unit announced in July that it was trying to raise $500 million in funds for acquisitions and expansion at a valuation of $3 billion.

That was after it had attracted funding from Ma's Yunfeng Capital and Prometheus Capital, backed by the son of China's richest man Wang Jianlin.

Originally known for publicly traded online video business Leshi Information and Technology Co Ltd, LeTV has expanded into smartphone and TV manufacturing. It has even set up a research center in the United States to spearhead electric car development, and is also building a sporting-event management business.