Status: Likely Clearance with Mitigation
Acquirer: NetPosa Technologies, (Chongqing) Ltd., (China)
Acquired: Arecont Vision, LLC (US)
Value: US$170 million
Industry: Technology Services
On October 18, 2017, Arecont Vision Holdings, LLC, a manufacturer of surveillance cameras through its wholly owned subsidiary Arecont Vision, LLC, brought a civil complaint in Delaware Court of Chancery against NetPosa Technologies, (Chongqing) Ltd., a Chinese based video solutions provider, and two entities owned and controlled by NetPosa, Wonder Vision Inc., a Delaware corporation, and Global Visiontech Industry Sdn. Bhd., a Malaysian company. See Arecont Vision Holdings, LLC v. Wonder Vision Inc., Compl. ¶¶ 1-6, Dkt No. 2017-0741 (Del. Ch. Ct., Oct. 18. 2017). The complaint alleges that Wonder Vision and Global Visiontech breached a March 1, 2017, Membership Interest Purchase Agreement to acquire Arecont Vision, LLC, and certain intellectual property for approximately $170 million. See id. at ¶¶ 1, 10-11.
According to the complaint, the parties filed a CFIUS notification and proceeded through review and investigation, with nine rounds of questions from the Committee, the first on April 17 and the last on June 21. Id. at ¶ 19. On “June 29, 2017, the parties had succeeded in obtaining CFIUS’s consent to the Transaction, subject to commercially reasonable mitigation requirements.” Id. at ¶ 20. The complaint alleges that on June 29, 2017, “the Defendants, without warning or explanation, began to intentionally stall the process with CFIUS at a critical juncture,” right when “it had become clear that CFIUS’s approval of the Transaction on reasonable terms had been achieved.” Id. It further alleges that “Defendants’ non-cooperation made it impossible for the CFIUS process to be completed and for the Transaction to proceed.” Id. “On September 2, 2017, [NetPosa, Wonder Vision, and Global Visiontech] notified Arecont Vision that they were terminating the Purchase Agreement as the result of the failure to obtain CFIUS approval for the Transaction.” Id. at ¶ 22.