noscript

News and Announcements

mm2 Asia To Acquire Majority Stake in Leading 3D Animation Services Company for S$3.06m

  • Published April 10, 2015 10:25AM UTC
  • Publisher Wholesale Investor
  • Categories Company Updates

Singapore, 9 April 2015

Following a term sheet inked in March 2015, newly-listed local movie producer and distributor, mm2 Asia Ltd.(“mm2 Asia” and together with its subsidiaries, the “Group”) today announced that it has entered into a sales and purchase agreement (“SPA”), through its wholly-owned subsidiary, mm2 Entertainment Pte Ltd (the “Buyer”),  to acquire a 51% interest in Vividthree Productions Pte Ltd (“Vividthree”), a leading multi-award winning player in Singapore’s 3D animation field, for a purchase consideration of S$3.06 million (“Consideration”).

Vividthree has an issued and fully paid-up share capital of S$50,000, consisting of 50,000 ordinary shares. Messrs. Yeo Eng Pu, Charles; Hong Wei Chien and Lee Hoon Hwee (the “Sellers”) each own 33%, 33% and 34% respectively of the entire issued and paid-up capital of Vividthree.

The Consideration comprises an initial cash payment of S$0.6 million upon signing of the SPA (“Initial Consideration”), while the remaining amount, which will be paid in either cash or shares, will be subjected to Vividthree achieving a net profit after tax (“NPAT”) of S$2.0 million (“Earn-out Amount) for the financial year ending 31 May 2016 (“Deferred Consideration”). The Consideration is based on a price-earnings ratio of three times the Earn-out Amount.

The Deferred Consideration is payable within three months of the delivery of Vividthree’s FY2016 accounts (“Final Completion”) and which will be satisfied as follows:

a)      If the 45-day volume-weighted average price of the shares of mm2 Asia immediately prior to the date of Final Completion (“Reference Price”) is at or below S$0.35: the Buyer will satisfy the Deferred Consideration by procuring the Group to issue Consideration Shares priced at S$0.30 per share which will be subjected to a moratorium of 10 months from the date of their issuance and allotment. For the avoidance of doubt, the Consideration Shares shall be issued to the Sellers at S$0.30 per share even if the Reference Price is below S$0.30; or

b)      If the Reference Price of the shares of mm2 Asia is above S$0.35 at Final Completion: the Buyer has the option to pay the Deferred Consideration in cash, together with a cash bonus which is computed based on a factor of 5/30 of the Deferred Consideration payable. It may also elect to issue to the Sellers such number of Consideration Shares at S$0.30 per share, which shall also be subject to a moratorium of ten (10) months from the date of their issuance and allotment to the Sellers.

In the event Vividthree does not achieve the target profit, the Consideration shall be proportionately reduced according to the percentage of shortfall of its NPAT for FY2016 against the Earn-out Amount (“Reduced Consideration”).

The Initial Consideration and Deferred Consideration, where not paid by the issue of Consideration Shares, will be funded through internal resources of the Group.

“This is the Group’s first major acquisition since our listing on the Singapore Exchange in December 2014, and this proposed strategic investment is aligned with our plans to diversify and expand into complementary business areas within the film production value chain,” saidMr. Melvin Ang, CEO of mm2 Asia Ltd. “With this lateral extension into 3D animation services, we are confident that we will be able to strengthen our competitive advantage as a movie producer and eventually gain access to new markets, customers and business opportunities.”

Based in Singapore, Vividthree is a leading player in Singapore’s 3D animation field, specialising in 3D stereoscopic animation, 3D animation and visual effects for feature films and commercials.  It also has a film production/content development arm. Its clients include renowned advertising agencies and corporate and government sectors.

 To read the full document, please click on the link below. 

Capital Insights
The Index Approach in Early-Stage Venture Capital: Reconsidered

The venture capital (VC) landscape is marked by its dynamism and complexity, especially in early-stage investing. The traditional approach in VC, characterised by a selective and intensive vetting process, often contrasts with the concept of ‘index investing.’ This article revisits the indexing approach in early-stage VC, incorporating insights from recent studies and data, including a […]

Capital Insights
The Future Is Now: The Evolution of Dealflow with Wholesale Investor

If you’ve ever thought of investing or expanding your portfolio, there’s no better time than the present. In the fast-paced world of investment, things are changing at a breathtaking speed, and it’s crucial to stay ahead of the game. The Future of Deal Flow is Today Dealflow, the lifeblood of the investment world, is not […]

Join over 45,000+ sophisticated investors

Join Now