The valuation of the target company has increased fivefold in a year. Why did King Kong Games design the transaction structure like this?

King Kong Game acquires the equity of Zhengyue Galaxy twice, and the consideration is paid differently before and after.

from the point of view of the whole transaction plan, King Kong Game acquires the equity of Zhengyue Galaxy twice, and the consideration is paid in different ways.

on August 25, 2016, King Kong Games acquired a 51% stake in Zhengyue Galaxy held by Hua Zhong Century by issuing shares at a price of 18.8424 million yuan. It is worth noting that Huazhong Century subscribed for the increased shares with a 51% stake in Zhengyue Galaxy.

after the transaction is completed, Zhengyue Galaxy becomes a holding subsidiary of King Kong Games, and Hua Zhong Century holds a 2.36% stake in King Kong Games.