Tarsus Group PLC Acquisition of Hometex (5801S)
December 22 2016 - 2:12AM
UK Regulatory
TIDMTRS
RNS Number : 5801S
Tarsus Group PLC
22 December 2016
22 December 2016
Tarsus Group plc
("Tarsus" or "the Group")
Acquisition of Hometex
Tarsus Group plc ("Tarsus" or the "Company"), the international
business-to-business media group, is pleased to announce that it
has conditionally agreed to acquire from the Guangdong Home Textile
Association and Association Member shareholders 65% of Foshan
Huaxia Home Textile Development Co., Ltd. ("Foshan Huaxia") (the
"Acquisition"). Foshan Huaxia owns the Home Furnishing Expo
(Hometex), the leading bi-annual home textiles exhibition in
China.
Hometex
-- Launched in 1997, Hometex takes place bi-annually in the
spring and autumn each year in Shenzhen. The next edition of the
event will be held in March 2017.
-- The spring edition, the larger of the two events, occupies
all of the available venue capacity, approximately 106,000m(2)
(2016) of gross space. There is a currently a waiting list for the
spring event.
-- The new exhibition centre planned for Shenzhen allows for
potential expansion to take place from the 2019 edition onwards.
The initial phase of the venue will see it triple in size to
300,000m(2) , potentially benefiting the wider Tarsus
portfolio.
-- The home furnishings market is now the fourth highest sector
of family consumption in China. Guangdong province itself accounts
for more than 50% of the Chinese home furnishing market by
value.
-- The Hometex brand has strong industry backing with one of the
original shareholders being the Guangdong Home Textile Association.
The Chinese Chamber of Commerce for textiles also has a long-term
partnership with Hometex.
Acquisition highlights
-- Acquisition of 65% of Foshun Huaxia for an estimated cash
consideration of RMB174m (approximately GBP19.3m), payable by way
of initial consideration of approximately RMB116m (approximately
GBP12.9m) with further payments of up to RMB58m (approximately
GBP6.4m) in 2017 and 2018 subject to certain conditions.
-- The maximum consideration payable is capped at RMB200m (approx. GBP22.2m).
-- For the year ended 31 December 2015, Foshan Huaxia recorded
unaudited profit before tax of approximately RMB22 million
(approximately GBP2.4m) and had net assets of approximately RMB30
million (approximately GBP3.3m).
-- The Acquisition is expected to be earnings accretive in the
financial year ending 31 December 2017 and thereafter.
-- The Acquisition will be funded from existing resources. Net
debt is expected to be within our long term target range of 1.5 -
2.0 times net debt/ EBITDA at the end of 2017.
-- The Acquisition is subject to normal governmental approval in
China and is expected to complete in the first quarter of 2017,
before the spring event.
-- The remaining 35% of the shares in Foshan Huaxia will
continue to be held by the Guangdong Home Textile Association and
Association Member shareholders, who are also exhibitors at the
events. The existing management will also remain in place.
Douglas Emslie, Tarsus Group Managing Director said:
"Following the recent acquisition of Intex in Shanghai, we are
delighted to be acquiring Hometex in Shenzhen. These are the two
key trading hubs in China for Tarsus and we now have four of the
largest exhibitions in Shenzhen. These acquisitions will further
deepen our exposure to industries benefiting from the strong shift
towards domestic expenditure that is underway in China, which is
the second largest exhibition market in the world.
"Hometex is the dominant home textile event in China and the new
exhibition centre in Shenzhen offers a significant organic growth
opportunity. Hometex will work closely with our housewares and home
interiors events in Istanbul and Jakarta to exploit the synergies
between each of them to grow, broaden and internationalise the
events. This represents a strong step forward in our Quickening the
Pace growth strategy."
For further information:
Tarsus Group plc:
Douglas Emslie, Group Managing
Director +44 (0)20 8846 2700
Dan O'Brien, Group Finance Director
Neville Harris, Investor Relations +44 (0)7909 976044
Notes to editors
Tarsus Group plc. (LSE:TRS) is an international
business-to-business media group with interests in exhibitions,
publishing and online media. The Group operates globally in the US
and Americas, China, Southeast Asia, the Middle East and North
Africa, Turkey and Europe, in key verticals including aviation,
medical, labels and packaging, discount clothing (Off-Price),
travel, housewares and automotive.
Tarsus runs more than 100 events and websites and its flagship
brands include the Labelexpo Global Series in Europe, the Americas
and Asia and the Dubai Airshow.
The Group operates across a worldwide network of offices in
Dublin, London, Jakarta, Milwaukee, Atlanta, Boca Raton (Florida),
Dubai, Shanghai and Istanbul.
For more information visit www.tarsus.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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