Global Market Group Ltd Acquisition (3908U)
15 October 2014 - 10:50PM
UK Regulatory
TIDMGMC
RNS Number : 3908U
Global Market Group Ltd
15 October 2014
Global Market Group Limited
Acquisition of the business of Globalmarket Logistics Co.,
Ltd
Global Market Group Limited ("the "Company" or "GMG") (AIM:GMC),
a leading manufacturer-to-business ("M2B") e-commerce service
provider dedicated to connecting manufacturers in China with buyers
all over the world, is pleased to announce that it has agreed to
acquire certain of the trade and assets of Globalmarket Logistics
Co., Limited. ("Globalmarket Logistics").
Background to the Acquisition
On 15(th) October 2014, the Company's wholly-owned subsidiary,
Guangzhou Long Xiang Supply Chain Management Company Limited ("Long
Xiang") entered into an agreement with Globalmarket Logistics
pursuant to which Long Xiang has agreed to acquire the logistics
business, customer contracts and other assets of Globalmarket
Logistics (the "Sale Assets"). The Company will acquire none of the
account receivables, deposits, creditor's rights and other
liabilities of Globalmarket Logistics.
Globalmarket Logistics is a company incorporated in the PRC and
principally engaged in the logistics and freight forwarding
business. Globalmarket Logistics was part of GMG before it was
divested in 2010 and has been independently managed since 2010. The
owners of Globalmarket Logistics are the brothers of David Ling,
the chief executive officer of the Company. The aggregate
consideration for the Sale Assets, which will be paid in cash at
completion, is RMB 3,010,653 (equivalent to GBP 299,234, exchange
rate: 10.0612). The consideration payable could increase to RMB
3,250,653 (equivalent to GBP 323,088, exchange rate 10.0612) after
completion if certain events relating to employees and leases
occur. Completion of the acquisition is anticipated to occur within
20 days of the signing of the agreement.
In addition, Globalmarket Logistics has agreed to provide
operational assistance and support to Long Xiang for a period
immediately following completion of the acquisition to enable the
smooth transition of the operation of the Sale Assets to the
Company.
Based on independent third party reports on Globalmarket
Logistics, the net profit of Globalmarket Logistics for the
financial year ended 30 June 2014 was RMB 1,094,782 (equivalent to
GBP 108,812, exchange rate: 10.0612) and the value of the business
of Globalmarket Logistics is RMB 3,772,000. The consideration
payable is in line with the value of the business unit as assessed
by an independent third party valuer.
Reasons for and benefits of the Acquisition
The Company's directors consider the acquisition a further step
towards building and promoting the Company as a global supply
centre. The trade and assets of Globalmarket Logistics will support
the development of the Company's new "small order transaction"
service, to be branded as "Snowball", that consolidates small buyer
orders so that they can be accepted by manufacturers with minimum
order quantity (MOQ) requirements.
Related party transaction
Under the AIM Rules, the acquisition is a related party
transaction as the majority shareholder of Globalmarket Logistics
is also a director of one of the Company's subsidiaries. The
Company's directors consider, having consulted with Grant Thornton
UK LLP, the Company's nominated adviser, that the terms of the
acquisition are fair and reasonable insofar as the Company's
shareholders are concerned.
About Global Market Group Limited
Global Market generates revenues by operating the online portal
www.globalmarket.com that connects high-quality manufacturers in
China with buyers from all over the world. GMC manufacturers listed
on the portal with "GMC" logo undergo independent quality audits
conducted by Germany's respected TUV Rhineland group ("TUV") to
gain Global Manufacturer Certificate (or "GMC") certification,
assuring international buyers they have met demanding and
independently-assessed certification standards, thus reducing risk,
building trust, and providing a convenient and inexpensive route
for manufacturers to access an international buying audience.
Manufacturers pay to use the web portal, and international buyers
are offered free access.
For further information, please visit www.globalmarket.com or
contact:
David Ling/ Cheandy Hu/ Mophy Fan
Global Market Group Limited: +86 (20) 8600 2299
Philip Secrett/ Maureen Tai/ Jen Clarke
Grant Thornton UK LLP, Nominated Adviser: +44 (0)20 7383
5100
Martin Davison
Westhouse Securities Limited, Broker: +44 (0)20 7601 6100
Allan Piper/ Jiang Lei
First City Public Relations: +852 2854 2666
This information is provided by RNS
The company news service from the London Stock Exchange
END
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