It acquires the entire share capital of Victory Hill which holds the rights to operate, market and promote the famous characters
PETALING JAYA: The Star Media Group has secured the rights to provide exhibition services of characters from comic book giant Marvel, as it looks to ride on the latter’s growing popularity in Asia.
In a statement yesterday, Star Media Group’s subsidiary, Singapore-listed Cityneon Holdings Ltd, signed a deal worth S$21mil (RM59mil) with Philadelphia Investments Ltd to acquire the entire share capital of Victory Hill Exhibitions Pte Ltd.
Victoria Hill holds the rights to operate, market and promote the Marvel exhibits for display in museums and science centres or other similar venues.
Iconic Marvel characters include the Hulk, Thor, Iron Man and Captain America, which were popularised by the movie The Avengers.
The Avengers was a huge success, earning more than US$1.5bil (RM5.6bil) globally, 19% of which came from Asian markets, according to reports.
China, South Korea and Japan represented 12% of those earnings. Cityneon, which is a leading provider of solutions for interior architecture, experiential environment, events and exhibitions, said in a statement yesterday that the acquisition of Victory Hill would bring it to a new level of providing exhibition services and add significant value to its global offering.
“The purchase consideration will consist of S$10mil (RM28mil) in cash, and the issuance of 45 million new shares of the company at 20 Singapore cents per share, upon completion of the purchase,” Cityneon said.
A deferred payment of S$2mil (RM5.6mil) and a variable incentive payment will be payable upon Victory Hill achieving certain profit targets by June 30, 2016.
Two further variable incentive payments are payable for profit targets achieved by June 30, 2017 and June 30, 2018, respectively, and will be paid in accordance to the terms of the sale and purchase agreement.
Victory Hill had on Jan 31, 2013, inked a licence agreement with Marvel Characters B V for the right to provide exhibition services for Marvel.
“Based on an independent valuation by Ernst & Young Solutions LLP as of Jan 15, the indicative fair market value of the shares of Victory Hill was within the range of US$15.4mil to US$18.4mil (RM57mil to RM68mil).
“When the acquisition is completed, Victory Hill will become a wholly owned subsidiary of the company, with its primary business being the development and production of exhibitions.”
The new subsidiary will also hold the right to produce and operate the travelling exhibition Marvel’s Avengers S.T.A.T.I.O.N (Scientific Training and Tactical Intelligence Operative Network). The exhibition is an immersive experience that brings visitors into the world of The Avengers, and is an interactive exhibit, said Cityneon.
On the rationale for the acquisition, Cityneon non-executive chairman Lew Weng Ho said: “We have always been hunting for interesting and complementary plays to add to our business mix. Other than increasing our global footprint and diversifying our revenue streams, the board is convinced that the acquisition of Victory Hill will bring us to a new level of providing exhibition services and add significant value to our global offering.”
To partially fund the purchase consideration, Cityneon is proposing a one-for-one rights issue at an exercise price of 18 Singapore cents per share. The exercise price represents a 30.8% discount to the company’s share price of 26 Singapore cents as at the close of trading on Wednesday.
Based on the issued share capital of the company of 88.53 million shares, and assuming that no employee share options are exercised, the group will raise up to S$15.1mil (RM40mil) in net proceeds if all rights are fully subscribed.
Victory Hill, together with a partner, had first premiered the exhibition in New York City at Discovery Times Square on May 30, 2014. The exhibition is slated to run until May 24, 2015, with ongoing discussions for an option to extend until December 2015 or January 2016.
Victory Hill also holds merchandising rights to manufacture, distribute and/or sell Marvel merchandise at the exhibition, and to operate retail outlets within such exhibition spaces during the exhibition’s tour in the United States and Canada.