TIDMMEGP
RNS Number : 7142E
ME Group International PLC
03 July 2023
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310.Upon the publication of this announcement,
this inside information is now considered to be in the public
domain.
3 July 2023
ME Group International plc
(the "Group" or the "Company")
Entering into a company split agreement with regard to the
acquisition of Photobooth Business in Japan (the "Transaction")
ME Group International plc (LON: MEGP), the instant-service
vending equipment group, is pleased to announce that today the
Company's Japanese subsidiary, ME Group Japan K.K. ("ME Group
Japan") entered into a binding conditional agreement to buy the
automated-photobooth business owned and operated by two
subsidiaries of FUJIFILM Corporation in Japan (the "Business").
The total Transaction consideration is approximately GBP5.5
million (Japanese Yen 996 million) and is capped at that amount but
may reduce subject to an adjustment mechanism under the binding
conditional agreement. The Group expects to fund the Transaction by
means of a new local loan facility on commercially advantageous
terms. Should this not be available, the Group will fund the
Transaction from its existing cash resources. The Group believes
that the Transaction will complete by the end of September
2023.
Commenting on the Transaction, Serge Crasnianski, Deputy
Chairman and CEO, said:
"We are delighted to announce the significant expansion of our
operations in Japan from our current installed estate of
approximately 10,500 photobooths in the region today. The
transaction fully aligns with our strategy of further consolidating
our leading market position in our core markets, as well as making
selective bolt-on acquisitions.
"Demand for Photo ID in Japan remains robust, driven by the
Japanese government's social security and taxation photo ID card
scheme. The acquired photobooths will be fully integrated into the
Group's operations in Japan and will benefit from operational
synergies under the Group's ownership.
"Upon completion, the Group will become the leading operator in
the Japanese photobooth market and long-term contracts with site
owners will provide ongoing predictable revenue streams."
Details of the Business
The photobooths being acquired under the Transaction (the
"Photobooths") are traditional photobooths, delivering official
photo ID pictures and are located in high-footfall locations, such
as travel hubs and shopping centres throughout Japan.
The average annual profit before tax derived from the
Photobooths over the previous three financial years ended on 31
March 2023 is approximately GBP 0.29 million (Japanese Yen 45
million) and the valuation of the gross assets on the balance sheet
that are the subject of the Transaction as at 31 March 2023 was
GBP2.98 million (Japanese Yen 469 million).
Details of the Transaction
ME Group Japan has entered into a binding conditional
absorption-type company split agreement (the "Agreement") with
FUJIFILM Imaging Systems Co., Ltd ("FFIS") and N&F Techno
Service Co., Ltd. ("NFTS") (together the "Sellers"; both companies
are wholly-owned subsidiaries of FUJIFILM Corporation). Completion
of the Transaction is subject to standard conditions required to be
satisfied before completion such as completion of the company-split
type absorption procedure in accordance with Japanese law, and is
conditional on certain further consents.
On or after completion, assuming that the agreement becomes
unconditional in all respects, ME Group Japan shall pay a maximum
consideration of approximately GBP5.5 million (Japanese Yen 996
million) in aggregate.
The Group expects this Transaction to be earnings-enhancing in
the financial year ending 31 October 2024. Should all the
Photobooths be acquired, this would increase the Group's Asia
Pacific revenue by 20 to 30 per cent and add approximately GBP2.2
million in profit before tax in the year ending 31 October 2024.
Consequently, the Directors believe ME Group Japan would become the
market leader in Japan.
Enquiries:
ME Group International +44 (0) 1372 453 399 | ir@me-group@hudsonsandler.com
plc
Serge Crasnianski, CEO
Stéphane Gibon,
CFO
Hudson Sandler +44 (0) 20 7796 4133 | me-group@hudsonsandler.com
Wendy Baker
Nick Moore
Ben Wilson
NOTES TO EDITORS
ME Group International plc (LSE: MEGP) operates, sells and
services a wide range of instant-service vending equipment,
primarily aimed at the consumer market.
The Group operates vending units across 19 countries and its
technological innovation is focused on four principal areas:
-- Photo.ME - Photobooths and integrated biometric identification solutions
-- Wash.ME - Unattended laundry services and launderettes
-- Print.ME - High-quality digital printing kiosks
-- Feed.ME - Vending equipment for the food service market
In addition, the Group operates other vending equipment such as
children's rides, amusement machines, and business service
equipment.
Whilst the Group both sells and services this equipment, the
majority of units are owned, operated and maintained by ME Group
International plc. The Group pays the site owner a commission based
on turnover, which varies depending on the country, location and
the type of machine.
The Group has built long-term relationships with major site
owners and its equipment is generally sited in prime locations in
areas of high footfall such as supermarkets, shopping malls
(indoors and outdoors), transport hubs, and administration
buildings (City Halls, Police etc.). Equipment is maintained and
serviced by an established network of 650 field engineers.
In August 2022 the Company changed its listed entity name to ME
Group International plc (previously Photo-Me International plc) to
better reflect the Group's diversification focus and business
strategy.
The Company's shares have been listed on the London Stock
Exchange since 1962.
For further information: www.me-group.com
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END
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