Business
Acquisition - UK Photo Division of Asda Stores Ltd
Acquisition - UK Photo Division of Asda Stores Ltd.
About this update from Me Group International Plc
[{"type":"text","content":"\n \nRNS Number : 8649H Photo-Me International PLC 23 August 2016 \n\n23 August 2016\n \nPhoto-Me International plc\n(\"Photo-Me\" or the \"Company\" or the \"Group\") \nPhoto-Me acquires the UK Photo Division of Asda Stores Limited\nPhoto-Me, the instant-service equipment group, is pleased to announce that it has agreed to buy Asda Stores Limited's (\"Asda\") Photo Division (the \"Photo Division\") which is operated in Asda stores in the UK (the \"Acquisition\"). Completion of the Acquisition is currently expected to take place on 31 October 2016 (\"Completion\").\nThe Photo Division consists of 191 photo centres, as well as 172 self-service kiosk sites located in Asda stores. These businesses will be managed by Photo-Me under a ten-year concession. As part of the Acquisition the employees of the Photo Division will transfer across to the Group.\nBesides those in-store locations, Photo-Me will also operate the Asda-branded online photo-processing offering for a minimum of 2.5 years. \nThis transaction strategically expands Photo-Me's estate in attractive locations offering convenience and high footfall, and enhances its online photo-processing offering. Photo-Me believes that it can increase its market share in the attractive digital photo-printing and consumer photo-merchandise markets. In addition, Photo-Me believes that under its management, the performance of the business could be significantly enhanced in the medium term.\nThe consideration for the Photo Division is £3.35 million, subject to downward adjustment in certain circumstances. Photo-Me has also agreed to buy the inventory available at each photo centre at the date of Completion, as well as central consignment stock, estimated at £2 million. The total consideration to be paid is currently estimated at £5.35 million and is capped at a maximum of £6 million.\nUnder the arrangements, Photo-Me will also pay Asda periodic commission payments, negotiated on commercial terms, based on the turnover, as well as business rates and costs of utilities.\nIn the calendar year 2015, the Photo Division generated unaudited sales of circa £19.3 million and made an unaudited loss of £3.4 million. The Group considers that the turnover can be raised materially by having a specialist like Photo-Me running the business, with its proven operational excel...