The Place Holdings has entered into sale and purchase agreements (SPAs) with Diamond Era Investment Limited and World Globe International Holdings Limited to acquire a 51% stake in Sun Oriental and Sun Xin investment for a consideration of $47.0 million.
The SPAs come after a non-binding memorandum of understanding (MOU) was entered into in March.
Based on the valuation report by Colliers, the indicative preliminary valuations of the stake come up to a total of $61.7 million. Of the amount, the stake in Sun Oriental is valued at $28.56 million, while the stake in Sun Xin is at $33.15 million.
Sun Xin is an investment holding company. It is mainly in the business to own and commercialise the intellectual property rights (IP rights) that currently yield recurring royalty income.
The rights include design patents and trademarks registered in China in relation to the operation and management of Shimao Tianjie Sky Screen and real estate properties associated with The Place.
The Place is a mixed-use development built in 2006. It comprises two top-tier office buildings and a high-end shopping retail mall at Guanghua Road in Beijing.
See also: Vitasoy ‘open to collaboration’ as speculation mounts over Philip Ng takeover
Sun Oriental is an investment holding company. According to The Place Holdings, it is intended that Sun Oriental’s wholly foreign owned enterprise in Beijing, Beijing Rongyuan Kechuang Technology Co., Ltd to complete the acquisition of certain assets and businesses relating to the Shimao Tianjie sky screen.
The sky screen is one of the largest sky screens in Asia with 7,500 sqm of LED lights spanning across a space that measures 250m long and 30m wide.
After the acquisitions are completed, The Place Holdings is expected to receive recurring royalties income from the licensing of the IP rights for the use in the operation and management of Shimao Tianjie sky screen.and the real estate properties associated with The Place.
See also: Anglo American to sell rest of coal business in US$3.8 bil deal
According to The Place Holdings, both the IP rights and Shimao Tianjie Sky Screen are income-generative businesses and the proposed acquisitions are expected to strengthen the group’s cash flow and financial performance.
On March 31, the group had signed an MOU with SMRT Corporation’s business arm, Stellar Lifestyle, to jointly shape the future of digital media and tap new opportunities in the digital economy.
Notably, both The Place Holdings and Stellar Lifestyle aim to build Singapore’s first sky screen, a suspended video screen that will be an enhanced version of Shimao Tianjie sky screen.
Ji Zenghe, executive chairman of The Place Holdings, says, “This is a unique opportunity for us to acquire income-generative businesses that have an established track record and proven business model. More importantly, the acquisitions give us scale and expertise to amplify our capabilities to push the boundaries of digital media, accelerating Singapore’s SMEs digitisation roadmap and harnessing new business opportunities within the digital economy.”
“With Singapore’s first skyscreen, we aim to shape the future of the digital economy, developing new value propositions in the digital realm. This will be a high-tech visual attraction in Singapore with an immersive multi-faceted platform for advertising, media, cultural activities,” he adds.
As at 9.30am, shares in The Place Holdings are trading 0.5 cent higher or 6.41% up at 8.3 cents.
