Kyland Technology, the Beijing-based firm often branded as China’s ‘first stock’ in robot operating systems, has abruptly terminated its high-stakes acquisition of industrial automation specialist Gowis. The deal, which had been months in the making, would have seen Kyland acquire 100% of Gowis through a mix of stock and cash. However, management cited a complex integration period exceeding six months as the primary reason for the retreat, opting instead for a non-equity strategic partnership.
The collapse of the merger highlights the friction between China’s ambitious industrial software developers and the boots-on-the-ground hardware distributors they seek to absorb. While Kyland possesses high-end proprietary technology like the Intewell industrial AI operating system, its bottom-line performance has been under significant pressure. Despite steady revenues hovering around 1.5 billion RMB, the company’s net profits have plummeted from nearly 58 million RMB in 2023 to just over 3 million RMB in the first three quarters of 2024.
For Gowis, the failed merger is yet another chapter in a long history of thwarted corporate transitions. The industrial automation supplier and distributor for giants like Siemens and Schneider has attempted to IPO three times since 2011, with the most recent effort withdrawn as recently as September 2024. By joining forces with Kyland as a partner rather than a subsidiary, Gowis gains access to next-generation AI controllers without the immediate scrutiny of a combined balance sheet.
The new 'phased' collaboration will focus on high-growth sectors where Beijing is desperate for domestic breakthroughs, including semiconductors, lithium batteries, and 3C manufacturing. The partners aim to develop at least ten key accounts and create standardized AI-driven factory solutions. By focusing on ‘synergy first, integration later,’ Kyland is attempting to preserve its 2025 earnings forecast, which projects a massive profit surge of up to 171% driven by the scaling of its AI-driven robotics solutions.