Buyer Consortium Led by Recco Control Technology and Dazheng Group Responds to Hollysys’ Update on Sale Process

Buyer consortium (“the consortium”) led by Recco Control Technology Pte. Ltd. (“Recco Control Technology”) and Dazheng Group (Hong Kong) Investment Holdings Company Limited (“Dazheng Group”) today issued a statement regarding Hollysys Automation Technologies Ltd.’s (NASDAQ: HOLI) (“Hollysys”) update on its ongoing sale process and disclosure of a supposed management-backed buyout proposal. Members of the consortium also include TFI Asset Management Limited, and Great Wall Capital Co., Ltd, who have entered into a memorandum of strategic cooperation with Recco Control Technology and Dazheng Group in connection with the proposed acquisition of Hollysys.

The Consortium remains extremely interested in acquiring Hollysys and is motivated to move swiftly through negotiations and due diligence with Hollysys. The Consortium encourages an independent and transparent sale process. In that regard, the Consortium believes shareholders should be aware of the full context regarding the ongoing sale process and relevant history regarding unsolicited takeover proposals at Hollysys.

Management Buyout – An Empty Gesture Already Used

Dating back to August 2021, Hollysys has publicly announced multiple take private offers from its management team. Ironically, the only two times Hollysys management has expressed apparent interest in taking the company private have coincided with the time periods when the Hollysys Board was evaluating proposals from unaffiliated bidders:

• On August 24^th, 2021, Hollysys announced it received a proposal to acquire the Company for US$23.00 per share in cash from a group that included an outside investor and the Company’s founder and co-chief operating officers. Notably, nothing ever materialized with this proposal, despite it being at a sizable premium at the time. This either calls into question the Board’s willingness to assess attractive takeover offers, or calls into question the management group’s sincerity or its ability to secure credible financing to back its takeover offers.
• Today, Hollysys has announced it received a proposal to acquire the Company for US$25.00 per share in cash from the same co-chief operating officers. At this time, this group does not consist of any outside investors or reference any funding source, meaning this proposal seems to be an even emptier gesture than the 2021 management takeover proposal. This announcement also draws attention away from the fact that nearly a third of shareholders have requested the Board to call a special meeting.

Shareholders Have Properly Resubmitted Request to Call Special Meeting