China’s Big Tree Cloud enters US$500M strategic merger for US listing

11 Oct 2023 --- Big Tree Cloud International Group and Plutonian Acquisition Corp. have conjoined in a merger. The merger agreement, leading Big Tree Cloud under the newly formed umbrella, Big Tree Cloud Holdings Limited to be traded on the Nasdaq Stock Market, positions itself amidst the international business echelons. The combined companies will be valued at an estimate of US$500 million.

Founded in 2020, the Chinese company Big Tree Cloud specializes in personal care and feminine hygiene products, using an integrated consumer-to-manufacturer model that blends online and offline operations. The product portfolio envisages catering to a demographic conscious of quality, sanitary and functional demands of personal care.

Plutonian Acquisition Corp. is a publicly traded special purpose acquisition company based in the US.

Mr. Wenquan Zhu, chairman of Big Tree Cloud, voices a commitment to “providing better personal and hygienic care for families in China and around the world.” The merger, in his words, marks a milestone towards expanding the product portfolio.

Wei Kwang Ng, CEO of Plutonian, further affirmed: “We firmly believe that Big Tree Cloud as a public company has the right model and technology to leverage its experience and platform to create shareholder value.”

Transaction details
The Proposed Transaction values the combined company upon the closing of the proposed transaction at an implied pro forma pre-money enterprise value of approximately US$500 million, at a price of US$10 per share. Upon closing, the current shareholder of Big Tree Cloud will retain a majority of the outstanding shares of the combined business, and Big Tree Cloud will designate a majority of the proposed directors for the combined company’s board.

Proceeds from the proposed transaction will support general corporate needs. Both Big Tree Cloud and Plutonian’s boards have unanimously approved the proposed transaction, expected to be finalized in the first half of 2024, subject to approval by the shareholders, regulatory approvals and other customary closing conditions.

A path to menstrual equity
Big Tree Cloud’s mission is an entwined web where social necessity meets business opportunity.Over the past two years, Chinese women have raised their voices against destitute access to sanitary products in low-income neighborhoods. Period poverty, exacerbated by COVID-19 economic challenges, particularly affects a few rural areas where girls resort to makeshift solutions like cloth and paper during menstruation.

In a time of rising prices for sanitary products, a number of female users on Chinese social media Weibo are calling against the financial strain of menstrual hygiene. A 13% sales tax on women’s pads in China sparks some suggestions for relief, highlighting the need to address the intertwined issues of necessity, affordability and gender equality.

Big Tree Cloud puts its attention on offering products like sterilized feminine pads and menstrual underwears. Through innovative sterilization technology, advanced absorbent core structures and anti-leakage designs, the company aims to bridge the gap between consumer demands and product availability.

In the meantime, Big Tree Cloud has also been donating products and providing education programs to combat period poverty and promote gender equality in China.

By Sichong Wang