Cango Inc. agrees to sell its China business for $351.94 million

SHANGHAI – Cango Inc. (NYSE: CANG), a company primarily known for its Bitcoin mining business with a current market capitalization of $438 million, has agreed to sell its PRC business to Ursalpha Digital Limited for approximately $351.94 million in cash. The sale includes an initial payment of about $210.64 million with the remainder contingent on fulfilling certain conditions. According to InvestingPro data, the company maintains strong financial health with a robust current ratio of 1.88 and impressive gross profit margins of 55%.

The transaction, referred to as the "PRC Business Disposal," follows a March 14 proposal from Enduring Wealth Capital Limited (EWCL) to acquire control of Cango and divest its PRC operations. Cango’s special committee and board of directors have approved the definitive agreements with Ursalpha Digital Limited, marking a significant response to EWCL’s letter of intent. InvestingPro analysis reveals that Cango holds more cash than debt on its balance sheet, with 14 additional key insights available to subscribers through their comprehensive Pro Research Report.

Completion of the sale is subject to shareholder approval and the company’s ability to separate its PRC business from its international operations, which include Bitcoin mining and automotive trading outside China. The closure of the deal would lead Cango to apply for the termination of its "China Concept Stock" status, which is under the jurisdiction of the China Securities Regulatory Commission (CSRC).

The agreement allows for the reversal of the sale if, within three months post-closure, the company’s "China Concept Stock" status is not terminated or if a proposed secondary acquisition of shares by EWCL from Cango’s co-founders is not executed due to a breach by the company.

Cango also anticipates amendments to its Purchase Agreement for acquiring crypto mining machines, which was initially settled through the issuance of Class A ordinary shares. Golden TechGen Limited (GT), a significant seller in this transaction, has agreed to negotiate any necessary amendments post-PRC Business Disposal.

The PRC Business Disposal is a strategic move for Cango, which has expanded into the crypto assets market and operates a leading Bitcoin mining business across multiple global regions. The company’s stock has demonstrated strong performance, with a remarkable 195% return over the past year and currently trades at a P/E ratio of 11.89. This announcement is based on a press release statement and contains forward-looking statements subject to inherent risks and uncertainties. The finalization of the sale and its implications for Cango’s operations and stock status remain conditional upon meeting the outlined terms and receiving the necessary approvals. For detailed valuation metrics and comprehensive analysis, investors can access the full InvestingPro Research Report, which provides expert insights on this and 1,400+ other US equities.

In other recent news, Cango Inc. reported an increase in Bitcoin production for March 2025, with the company mining 530.1 Bitcoins, up from 472.7 in February. The company also announced an extension to the deadline for closing its crypto mining assets acquisition, initially set for March 25, 2025, as per a filing with the SEC. Furthermore, Cango has been included in the Bitwise Bitcoin Standard Corporations ETF, highlighting its strategic focus on Bitcoin mining. The company received a preliminary non-binding letter of intent for a potential buyout, with a special committee formed to evaluate the proposal. In addition, Cango launched a $30 million share buyback program, aiming to maximize shareholder value. These developments reflect Cango’s ongoing efforts to expand in the cryptocurrency sector while maintaining its core operations. The company’s strategic moves, including the share repurchase and potential acquisition, are being closely watched by investors.

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