Cleantech Solutions International Inc secured a major deal with Ecrent, a global rental platform. At time of writing the firm’s shares were up 24.49 percent to $5.18. The deal involves the creation of a committee to look at the future of cooperation between the two firms.
That committee, according to a press release, may lead to Ecrent acquiring Cleantech Solutions International Inc . The massive rise in the value of the firm on Tuesday morning is the likely result of hopes that an acquisition is on the cards very soon.
Cleantech helps Ecrent grow
The talks between the two firms will center on how they can work together to capture part of the sharing economy in China. Cleantech Solutions International Inc sells forged and fabricated products to a range of clean technology firms. It is also involved in the manufacture of dyeing and finishing machines for textiles.
Ecrent operates a massive global renting platform across more than 30 countries. The very different business models of the firms makes it difficult to see why there are cooperation talks at all. The answer, as is often the case in odd-looking joint ventures, is China.
The firms plan to talk about working together in order to target the sharing economy in the East Asian giant. With Ecrent’s focus on online rental, and Cleantech Solutions International Inc work in heavy industrial machinery, that could be a marriage made in heaven.
Cleantech acquisition possible
Cleantech Solutions International Inc will have exclusive talks with Ecrent for the next three months. The board involved in the talks may decide to extend that period if desired.
Cleantech is based in China, a country where it can be notoriously hard to close acquisitions. Different corporate cultures, and sometimes outright fraud, have lead many firms to get burned in deals with companies from the country.
Cleantech Solutions has a market cap of just 7 million after this morning’s massive rise in value. Despite the potential deal with Ecrent, it’s still among Wall Street’s micro-caps. For some lucky traders on Tuesday morning, however , Cleantech Solutions represents much more than that. 20 percent rises in a single day aren’t common, and this move has surely made somebody’s day a whole lot better.