After the shareholders' meeting ended, the news of Didi's acquisition of Qingju Technology quickly spread to the outside world, triggering heated discussions.
Even while the meeting was in progress, news leaked out one after another.
Obviously some shareholders were dissatisfied with this meeting, but rules are rules.
Chen Dongcheng has the greatest say. Even if they are dissatisfied, they can only accept it.
Didi couldn’t wait to announce the news to the outside world.
“I am very happy that Didi Chuxing can sign a wholly-owned acquisition agreement with Qingju Technology.
Qingju Technology will officially join Didi and become a member of our big family.
In the future, the two companies will maintain independent operations, and Didi Chuxing will continue to invest in Qingju Technology.
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Reporters paid more attention to the inside story of the transaction, and some well-informed reporters even learned some inside information.
It seems that Didi secured a shareholder with the largest shareholding before acquiring Qingju Technology.
But when it comes to the most critical figures, even those dissatisfied investors are tight-lipped.
Although they were dissatisfied with the acquisition, the conditions Chen Dongcheng gave them were very good.
Qingju Technology has not raised many rounds of financing, except for the A-round investment institution which only took double the liquidation rights.
Investment institutions in rounds B and C received twice the liquidation priority and a 20% annual dividend.
Liquidation preference is usually of little use and is just an inconspicuous provision in investment terms.
This rule will be critical when the company is sold.
For example, several investment institutions that came into the C round of Qingju Technology originally invested US$300 million, with twice the liquidation priority and an annual dividend of 20%.
Generally speaking, the later an investment institution enters, the earlier in the priority sequence it will enjoy when the company is sold.
Therefore, investment institutions in the C round can be the first to get back the principal and their interests when selling.
After research, the investment institutions in Qingju Technology’s C round all plan to exercise their liquidation preference instead of converting their preferred shares into common shares.
If we only follow the calculation of their common stock holdings, the institutions in the C round can only get away with US$370 million based on the sale price.
Compared with their investment cost, they only made 70 million US dollars, which is not interesting.
But if they exercise their liquidation priority, they can get twice the liquidation amount of US$300 million, which is US$600 million.
In addition, there is an annual dividend of US$60 million for one year.
All in all, it takes less than a year for several investment institutions to enter the C round.
Not only did I get my principal back, I also doubled my profit.
At this point, investors in the C round have made a lot of money, but this still doesn’t make them particularly satisfied.
Chen Dongcheng has always adhered to the bottom line and resolutely refused to let them add participation in distribution terms.
The so-called participation distribution clause refers to these investment institutions exercising their liquidation priority and receiving the agreed multiple of principal and dividends.
They will convert the preferred shares they hold into common shares and continue to share the remaining value with other shareholders.
It sounds confusing, but to put it bluntly, entrepreneurs can lose money, but they must make money.
In the industry, there are many companies with weirder terms than the one signed by Qingju Technology.
For high valuations, higher financing amounts, even three or four times liquidation multiples, they dare to promise.
When a company goes bankrupt or is merged, these investors will show their cold-blooded side.
After the cake has been divided among them, it would be nice if the founder could have some crumbs left.
The money given by Didi first fed the investment institutions of ABC three rounds, and the rest was divided among Chen Dongcheng and others.
The selection of investment institutions for round B is the same as that for round C, after twice the liquidation preference is exercised.
Take away 400 million U.S. dollars, plus two years of annual dividends of 80 million U.S. dollars, for a total of 480 million U.S. dollars.
It will be simple for the remaining A-round investment institutions. They will definitely not exercise their liquidation preference.
When they signed the contract, they only got double the liquidation rights.
If the liquidation preference is really exercised, only US$100 million will be taken away, plus an annual dividend of US$60 million.
They converted the preferred shares they held into common shares without any suspense, and then distributed the remaining money to Chen Dongcheng and several other founder shareholders.
Had Didi not just swallowed up Uber China, it would have been reluctant to acquire Qingju Technology through additional equity issuance.
Didi's equity is very valuable. Not only Chen Dongcheng knows this, but others also understand it.
Rounds B and C basically take the money, and the remaining employees hold shares more easily.
Chen Dongcheng directly asked Li Changqing and others to come forward to negotiate.
Based on Didi’s purchase price, the options previously issued to these employees will be repurchased.
The employees were naturally satisfied and had nothing to say. When many companies were acquired, the option agreements they signed were a piece of waste paper.
In comparison, Chen Dongcheng can still respect them.
The price offered to them was also consistent with Didi's purchase price, and they all signed the repurchase agreement readily.
After getting rid of the employees, only Ding Baoshan, Zhao Yin and the two investment institutions of the A round are left.
Ding Baoshan planned to take it easy, sign the repurchase agreement, and transfer the equity he held to Chen Dongcheng.
"Tsk, tsk, 100 million US dollars, you really didn't lie to me!"
Ding Baoshan looked at the contract with great satisfaction, realizing that the promise he had made to him had actually been fulfilled.
Although in recent years, there have been times when he has been criticized by netizens without thinking, it does not prevent Ding Baoshan from becoming a billionaire at all.
Chen Dongcheng smiled and patted Ding Baoshan on the shoulder: "Don't forget to pay taxes."
"Don't worry, I know it in my heart. I won't feel bad about spending the money!"
Ding Baoshan grinned and began to persuade Zhao Yin for Chen Dongcheng.
"Old Zhao, we have worked together for more than two years, and you have indeed made great contributions to Qingju Technology.
But since everyone has decided, let's not regret it.
Now that Dongcheng wants to acquire your equity, you might as well give it some face.
We can continue to cooperate in the future. If you start your own business, I will definitely invest in you."
Zhao Yin glanced at Chen Dongcheng and hesitated for a while.
He is also not sure whether he should ask for equity in Didi or directly ask for cash.
Since Chen Dongcheng is ready to acquire equity, it means that he must be very optimistic about Didi's prospects.
But think about the little equity you have, even if it is converted into Didi's equity, it won't be much.
Zhao Yin sighed: "Dr. Chen lent us 50 million when we were most in need of money. I will always remember this. This time I have made it clear with Director Chen."
After Zhao Yin finished speaking, he signed the contract neatly and walked out of the office.
The remaining two investment institutions cannot make any trouble.
After they signed the contract, Chen Dongcheng sent them out of the conference room with a smile.
After everyone left, Chen Dongcheng could finally breathe a sigh of relief.
After acquiring all the equity of these people, Chen Dongcheng asked Li Changqing and others to contact several investment institutions in the C round.
Paying some price to buy back part of their shares increased the value of their equity to exactly 2.7 billion US dollars.
Li Changqing and the others had been busy all day and spent a lot of time talking about this acquisition.
"Boss, after everything is done, you need to pay a total of US$937 million.
All the stocks issued by Didi this time will be listed in your name."
Chen Dongcheng nodded, indicating that he understood.
This time Didi acquired Qingju Technology, Chen Dongcheng did not earn a penny, and had to pay 937 million U.S. dollars.
This does not include the taxes generated by the transaction, but Li Changqing and others will be responsible for calculating these, and finally give the total to Chen Dongcheng.
If Tottenham hadn't performed well last season, they would have provided Chen Dongcheng with more than 600 million pounds.
Where did Chen Dongcheng get the money to acquire the equity of these people?
Thinking that Didi's valuation could at least double, Chen Dongcheng felt that his hard work was worth it.
At the celebration cocktail party after the merger, all investors gathered together to talk.
Many people looked at Chen Dongcheng, especially the executives of Didi Fang, who had particularly strange expressions on their faces.
They never dreamed that Didi would get involved with Chen Dongcheng, and in this way.
"Welcome Mr. Chen to return to the Didi family!"
The expression on Liu Qing's face was very magnanimous. As for the seat on the board of directors, Chen Dongcheng was also prepared this time.
At least among Didi’s shareholders, Chen Dongcheng’s shareholding ratio ranks second.
Ranking second only to Uber, which recently completed its merger with Didi.
Chen Dongcheng smiled and clinked his wine glasses with Liu Qing: "Mr. Liu, nice to meet you."
Right and wrong are nothing more than a matter of stance.
Even now, Chen Dongcheng does not take Didi too seriously. Didi is just a springboard for him to accumulate wealth.
If there is a suitable opportunity, he will choose to sell Didi's equity, provided that the price satisfies him.
The listing of Didi was not completed until Chen Dongcheng was reborn. Chen Dongcheng did not have the patience to wait any longer.
The atmosphere of the reception was very harmonious, with laughter and laughter everywhere.
Didi’s purchase price made everyone very satisfied.
None of the investors present left with huge returns.
It was possible to achieve such a dazzling performance during the cold winter of capital.
For these fund institutions, the next batch of fund raising will be smoother.
The only people who were sought after at the cocktail party were Chen Dongcheng and Cheng Wei.
One is the leader of Didi, and the other is the biggest winner of this transaction.
"Congratulations to Mr. Chen. Mr. Chen is really discerning. I look forward to seeing Mr. Chen on the Forbes rich list this year."
"Mr. Chen is ranked in the top 50 this year, so there should be no suspense."
"Mr. Chen is so young. In a few years, Lao Wang will be pulled down by Mr. Chen."
…
Despite so much praise, Chen Dongcheng can still remain calm and collected, which makes a group of veterans who have been in the business world for many years unable to help but admire him.
If they were at this age and were praised by a bunch of big shots, they would have fallen into disgrace a long time ago.
Cheng Wei laughed loudly and said: "Don't flatter Mr. Chen. We, Didi, are the ones bleeding the most this time. We have paid a lot to acquire Qingju Technology."
The people present were all smart people, and they all expressed no doubt about Cheng Wei's words.
No matter how you look at Didi's current acquisition of Qingju Technology, it is a loss-making move.
It seems like 3.7 billion US dollars was spent, which is a bit painful.
But it killed a potential competitor in the cradle, which is the most important thing to Didi.