SHENZHEN, China, March 31, 2015 (GLOBE NEWSWIRE) -- Xunlei Limited ("Xunlei" or the "Company") (Nasdaq:XNET), China's leading provider of acceleration products and services, today announced that it has entered into a legally binding framework agreement with Beijing Nesound International Media Corp., Ltd. ("Nesound"), an independent third party, to sell the Company's entire stake in its online video streaming platform, Xunlei Kankan.
The Company intends to sell Xunlei Kankan for a consideration of RMB130 million. Xunlei's Board approved the transaction after considering the benefits of the transaction to the Company and its shareholders. The Company believes that the divestment of Xunlei Kankan is consistent with Xunlei's new strategic focus on streamlining existing non-core and unprofitable businesses so as to devote sufficient management attention to execute strategies on mobility and Project Crystal. The completion of the transaction is subject to the signing of a definitive purchase agreement and fulfilling closing conditions contained therein, which may include the completion of a specific research and development project, the transfer of domain name and other assets and businesses of Xunlei Kankan, and the application for the transfer of permits and licenses required for Xunlei Kankan's operations. If the transaction fails to close due to the fault of either Xunlei or Nesound, including the failure to meet closing conditions, the responsible party shall be liable to pay an additional fee of RMB52 million.
Mr. Sean Zou, Chairman and Chief Executive Officer of Xunlei, stated: "I am pleased that the Board has unanimously approved the sale of Kankan as part of our initiative to streamline existing businesses and to focus on our continued transition to mobile internet, which we expect will offer our employees and our investors with exciting future prospects."
"As I mentioned in our last earnings call, we are convinced that it is necessary to respond to changing environment, technical innovation and more diverse customer expectations with a bold new beginning. Xunlei will tap the growth potential created by its transformation from a primarily PC-based company to a mobile internet company, which we believe to be critical to our long term growth," added Mr. Zou.
Xunlei Limited ("Xunlei") is the No. 1 acceleration product provider in China as measured by market share in December 2014, according to iResearch. Xunlei operates a powerful internet platform in China based on cloud computing to provide users with quick and easy access to digital media content through its core products and services, Xunlei Accelerator and the cloud acceleration subscription services. Xunlei is increasingly extending into mobile devices in part through potentially pre-installed acceleration products in mobile phones and to living rooms through TV coverage. Benefitting from the large user base accumulated by Xunlei Accelerator, Xunlei has further developed various value-added services, online game and pay per view, to meet a fuller spectrum of its users' digital media content access and consumption needs.
Safe Harbor Statement
This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by terminology such as "will," "expects," "believes," "anticipates," "future," "intends," "plans," "estimates" and similar statements. Among other things, the management's quotations regarding the agreement and the Company's strategic, operational and acquisition plans, contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Forward-looking statements involve inherent risks and uncertainties, including but not limited to: the Company's ability to continue to innovate and provide attractive products and services to retain and grow its user base; the Company's ability to keep up with technological developments and users' changing demands in the Internet industry; the Company's ability to convert its users into subscribers of its premium services; the Company's ability to deal with existing and potential copyright infringement claims and other related claims; and the Company's ability to compete effectively. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by the Company is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of the press release, and the Company undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.
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