It was only noon when the plane arrived in Hangzhou. Li Mu, Lin Ching-ah, and Ding Zhenglin first checked into a high-end hotel in Hangzhou in a low-key manner. After the two of them returned to their respective rooms to put down their luggage, they immediately went to Li Mu's room to discuss more specific negotiation strategies.
Zhao Xianliang had already introduced Hikvision's situation to Li Mu. Generally speaking, it was a hard living made by a bunch of powerful people. They had no money, and the future was not bright enough. They were hoping to find someone to invest in them. To sum it up, Hikvision's main theme was the lack of money.
As the most active entrepreneur in the country's high-tech industry, Li Mu's influence on the entire industry went without saying. It could even be said that the high-tech enterprises in the country would not reject Li Mu's investment.
However, the most critical problem was that Li Mu was not just an investor with cash, but a demolition team with money and knives.
He did not want to simply invest in Hikvision. If that happened, he could only exist as a shareholder of Hikvision and enjoy the dividends of Hikvision's development, but he would not be able to control Hikvision and make it develop in the direction he wanted. Most importantly, if Hikvision did not belong to him legally, he would not be able to carry out a new integration with it.
The so-called new integration was to integrate Hikvision into a new plate and make a comprehensive acquisition.
It was indeed not easy for Li Mu to set up a new plate, and for Hikvision to smash its original plate and add it to their new plate. It was not easy for them to change from the original owner to the contributing shareholders.
If Hikvision did not agree, or asked for too much, then he could only buy other companies that were similar to Hikvision, and become the most direct competitor of Hikvision.
If all the companies that were conspired to be acquired were compared to ordinary people with homesteads, then the companies like Li Mu's would be a demolition team and a developer.
Some people looked forward to the demolition to the point that their eyes were green with anticipation. When the demolition team arrived, they would immediately discuss the conditions. If they agreed on the conditions, they would move their entire family. They would sell their houses and land for cash, and then exchange a few houses with a new developer. If they failed to reach an agreement, they would become a holdout and drag it out until better conditions were introduced.
However, some people were unwilling to be demolished, and would rather die than submit to continue living in this hot land. For developers and demolition teams, they could only do so by force if they had the ability, and if they couldn't, they could just take a detour.
At the moment, as a demolition team, Li Mu came to Hangzhou for the first demolition negotiation with Hikvision. Since he was not sure if Hikvision would accept the "demolition", the first thing he had to determine was the price he should quote for Hikvision's "house".
If he wanted Hikvision to give up its own development and exchange 100% of its shares for 20% of the future Makino Vision, he would first have to offer them with sufficient conditions.
However, Hikvision had only been established for a year, and was still in the research and development stage. Without any revenue flow and market feedback, it was difficult to come up with a suitable valuation.
The current Hikvision's greatest wealth was made up of two parts: one was the top talents from 52 Universities, and the other was the research results of 52 Universities, both of which were considered soft power.
Lin Qingya's previous investigations had shown that Hikvision's greatest technological advantage lay in its coding and decoding technology as well as its back-end storage products. In these two areas, they had the foundation of the 52 Institutes' original technology, so their R&D capabilities were extremely strong.
However, Hikvision also had its own difficulties. It had not yet entered the front-end camera market, which meant that it could not manufacture cameras at the moment, and cameras were one of the most important parts of the Skynet system planning.
In other words, after acquiring Hikvision, Li Mu would either invest money in Hikvision's front-end camera research, or simply take over another company that specialized in front-end cameras to complement Hikvision.
Therefore, Hikvision was still considered a high-tech R&D company, not a hardware manufacturer. Its main position was to be a solution provider for some subdivisions in the security surveillance field. It did not have the ability to connect all the hardware and software, front and back, and become a one-stop company for security surveillance research and development, production, promotion, and sales.
In view of this situation, the three of them discussed for a long time and finally reached a consensus: based on Hikvision's current situation, the company's valuation could not be higher than 50 million.
After Ding Zhenglin thoroughly understood all of Li Mu's architectural plans and the 50 million price point, he said to Li Mu, "Li Zong, there's a problem. Hikvision and 52 Universities are state-owned enterprises. Their goal is to find development opportunities in the market, so they should still have a long-term vision."
At this point, Ding Zhenglin continued, "In my opinion, what Hikvision lacks now is funds to invest in the operation of the company, not the cash after the sale of the company. Therefore, if we want to establish a Makino to acquire them, we have to give them more room for development. If it's just for money, it'll be very difficult for them to agree."
Li Mu nodded and said, "It's not difficult to acquire traditional state-owned enterprises that are a mess, but it's not easy to acquire a state-owned enterprise like Hikvision with long-term goals and strategic planning."
Ding Zhenglin said, "We don't have any technical reserves directly related to the security surveillance field, so we have very few effective resources to invest in Muye Vision. We don't have enough soft power or hard power. I'm afraid it'll be difficult to truly impress Hikvision and 52 Universities. We have to find a way to make us more attractive to them."
Li Mu smiled and said, "You're right, so we have to analyze Hikvision's needs in depth and then find a solution to the problem.
"For example, Hikvision needs money first, so if we give them a valuation of 50 million and still want them to be willing to merge with Muye Vision and hold only 20% of Muye Vision's shares, we have to first fill the future valuation of Muye Vision to 200 million. That's the premise. How to fill the 200 million is the problem we have to consider."
Ding Zhenglin said, "There is a feasible capital operation model. We can first establish Makino Vision and put two hundred million in cash in Makino Vision's account. That way, Makino Vision's market value will be two hundred million in cash. If Hikvision is willing to be acquired by Makino Vision, it will own twenty percent of Makino Vision's shares. At that time, Makino Vision will own two hundred million in hard assets and fifty million in soft assets of Hikvision, which will add up to a valuation of two hundred and fifty million."
Lin Ching-ah also nodded and said, "I think Mr. Ding's idea is very feasible. Hikvision needs money, and this 200 million cash means a lot to them. It means that once they join us, all their research fields will have a large injection of funds, which will allow them to develop faster. If they don't join us, they can only continue to live on the sidelines and tighten their belts. Do you think they'll be tempted?"
Li Mu thought for a while and said, "It's too simple and crude to directly register a company and put 200 million cash on it. Personally, I feel that if we directly use 200 million cash as a lure, once Hikvision agrees, because we don't have a deep understanding of this industry, they will basically have the right to use the money in the future. In this way, it will be difficult to maintain the balance between us in the future, and we won't have enough ability to balance Hikvision's team."
Lin Ching-ah and Ding Zhenglin also agreed with Li Mu's concerns. They didn't understand a field, but they still had to fork out 200 million cash for someone who knew the field. This was indeed too uncontrollable for the investors, and it was very risky. Even venture capitalists would first invest 10 to 20 million in Series A to see the results before deciding whether or not to invest further.
Everyone fell silent. Everyone was thinking about how they could build their own platform, attract Hikvision to join them, and at the same time, ensure that they could control the entire platform in the future.
After thinking for a while, Li Mu had an idea and was the first to break the silence. He said, "Isn't Hikvision's current advantage focused on encoding and decoding technology and back-end storage products? Then we'll acquire a capable and pure camera equipment manufacturing company and use it as a part of the 200 million market value. We'll use the remaining money to make up for the rest. This way, if Hikvision agrees to join us, we'll have a camera equipment manufacturing team that can cooperate with them and balance each other out. This way, we can maintain a basic balance. Moreover, we'll have an additional front-end equipment manufacturing link in our platform, which will also increase our attractiveness to Hikvision. "
Both of their eyes lit up, thinking that it was a good idea.
They didn't know the field themselves, but they were afraid that someone who knew the field would be out of their control. The best way was to find someone who knew the field to balance each other out. If the person who knew the field didn't have a conflict with the other person, and could even complement each other, it would be even more perfect.
Li Mu thought about it and said, "This way, together with our Makino Technology's software development team, we'll have three teams! The internal balance will be more stable.
"The camera equipment manufacturing team will be responsible for the front-end cameras of the Skynet system, Hikvision will be responsible for the back-end decoding and storage of the Skynet system, and the developers of Makino Technology will be responsible for the software support of the entire Skynet system. After the three teams are integrated, Hikvision will be able to own the entire industry chain from front-end cameras to data processing, transmission, and data storage in the future. Therefore, Hikvision's prospects are much greater than Hikvision's, which Hikvision itself should be able to see."
Ding Zhenglin said, "Li Zong, if that's the case, we can also bring in our Makino Technology's marketing resources and Taobao's sales channels to complement Hikvision in the future. I believe that it will be even more attractive to Hikvision."
Li Mu nodded and said, "Very good. We have the front end, the support, the resources, the channels, and the funds. After these five points are taken care of, we will have all the links in the security monitoring industry except for Hikvision. When the time comes, as long as we integrate Hikvision, we can directly build a mature, complete, and advanced industrial chain. I believe it won't take long for us to develop the Skynet Surveillance System."
Lin Ching-ah hurriedly said, "I have the information of several camera equipment manufacturers that I've sorted out before. The largest manufacturers in the country are basically all in Shenzhen. If we can take over these manufacturers first, we'll have more initiative against Hikvision!"
Li Mu said happily, "Everything happened too suddenly, and the preparations were too hasty, so it's impossible to take care of everything in such a short time. Since I've already made an appointment with Hikvision, I'll draw a big pie for them today!"
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