EastBridge Investment Group Inc. (OTCBB: EBIG), a provider of financial services to emerging companies looking to go public on U.S. exchanges, has recently been focused on helping U.S. companies expand into foreign markets via joint ventures. Its first client is Cambrium Learning Group Inc. (NASDAQ: ABCD), which is looking to partner with Chinese education companies similar to ChinaEdu Corporation (NASDAQ: CEDU).
Cambrium Looks to Partner in China
With its expertise in China’s growing marketplace, EastBridge is uniquely positioned to offer U.S. companies exposure to emerging economies. In May of 2011, Cambrium Learning entered into a consulting agreement with the EastBridge to seek out opportunities in China for joint ventures, partnerships and merger & acquisition (M&A) work.
Under the 12-month agreement, EastBridge will receive a cash fee of 10% of the total revenue derived from each business venture resulting from an introduction by the company, paid quarterly over a maximum of three years and with a $50,000 non-refundable advance paid at closing, according to an 8-K filing with the SEC.
Mr. Keith Wong, CEO of EastBridge, commented, “Cambium is a great company with a rich suite of products for online applications. Many of their K-12 products can be adapted to students in China, which has a total elementary, junior and high school student population of more than 200 million. We are very excited to be retained as a consultant to help them seek out opportunities in China for joint ventures, partnerships and merger & acquisition (M&A) work. We have substantial experience in China to help our clients achieve their expansionary goals.”
JV Business Model Could Pay Off Long-term
EastBridge’s primary business of helping emerging companies obtain a listing on U.S. stock exchanges involves lengthy timeframes and approvals. In contrast, the joint venture model is a relatively straightforward private business transaction. And since the payout is tied to revenues, it provides shareholders with a virtual equity stake in the company.
Currently, the majority of the company’s 14 clients are utilizing other services, but the joint venture model could be expanded moving forward. After all, the slowdown in the U.S. and E.U. is forcing many companies to look to emerging markets in Asia for growth potential. These agreements would provide faster revenues with economics similar to its standard services.
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