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Chinese Cinema Operator SMI to Acquire Ticketing System Technology Firm, Cinemas.


1 June 2016 - Chinese cinema operator SMI Holdings has entered separate agreements to buy a ticketing technology company and six movie theatre properties, the company said.

SMI Holdings Group Ltd.'s SMI International Cinemas Ltd. subsidiary has entered into sale and purchase agreements with Jiayuan International Group Ltd.'s Taixing Hengyuan Property Development Co Ltd. subsidiary and Zhejiang Jiayuan Property Group Ltd. for the acquisition of a total of six properties with movie theatre operations in Jiangsu Province, the People's Republic of China at consideration of approximately RMB 150m (USD 22.79m), the company said.

Meanwhile, the group entered into a MOU, in relation to acquire the entire issued share capital of Loyal Coach Ltd. at consideration of RMB 1.50bn, of which RMB 1bn and RMB 500m will be satisfied by cash and way of allotment and issue of the consideration shares respectively.

Loyal Coach holds the entire issued share capital of Beijing Huaxia CMTS Urban Ticketing System Technology Co Ltd.

Upon completion of the Possible acquisition, the group will in turns hold the entire issued share capital of Huaxia CMTS, which specialises and engages in the development, application and system integration of cinema computer ticketing system and provision of application solutions for mobile cinema ticketing system.

Huaxia CMTS has a leading market share in the national cinema computer ticketing system and number of cinema users. It has a vertical coverage on the national movie data centre system, 24 provincial movie data centre systems and more than 2,200 cinema ticketing systems.

It is currently expected that the number of cinemas using Huaxia CMTS's cinema ticketing system will reach 3,000 in the coming two years.

Pursuant to the MOU, the Loyal Coach undertake to the group that the aggregate guaranteed profit for the profit guarantee period for the three financial years ending 31 December 2018 of Huaxia CMTS shall be RMB 380m.

SMI Holdings Group is principally engaged in the business of movie theater operating and new complementary business, such as Xingmeihui and advertising and promotion business.

The number of SMI's movie theater has grown from 3 in 2009 to 200 by the end of 2015.

Country: China

Sector: Media

Target: Six properties with movie theatre operations in Jiangsu Province, Loyal Coach Ltd

Buyer: SMI International Cinemas

Vendor: Taixing Hengyuan Property Development, Zhejiang Jiayuan Property Group

Deal size in USD: 252.79m

Type: Corporate Acquisition

Financing: Cash and Stock

Status: Agreed

Buyer advisor: , ,


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Publication:M & A Navigator
Date:Jun 1, 2016
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