PUC buys a third of Pictureworks for RM52.8mil

Legoland Malaysia

KUALA LUMPUR: PUC Bhd is proposing to buy a third of the shares in a company that provides imaging services to Kidzania and Legoland Malaysia for RM52.8mil under a plan to expand its advertising and media revenue base.

The acquisition of Pictureworks Holdings Sdn Bhd, PUC said in filing with Bursa Malaysia today, is expected to generate more than a quarter of the group’s future profit.

“The board has identified the imagery capture sector as new business segment to enable the PUC Group to expand its business portfolio and to diversify its revenue sources,” PUC said.

The acquisition will be settled via the issuance of new shares and cash.

PUC will be buying the 33% equity interest in Pictureworks from several vendors including its group managing director and CEO Cheong Chia Chou, who is a major shareholder in both PUC and Pictureworks.

The company said Cheong and all parties connected to him will abstain from voting on the proposed acquisition.

To pay for the acquisition, PUC will be issuing 64.6 million new shares to the vendors at 32.2 sen each amounting to RM20.8mil. A cash settlement of RM32mil will be made on a staggered basis upon meeting certain profit guarantee.

Shares in PUC, which had shot up almost 400% so far this year, was last traded at 32 sen.

PUC said Pictureworks has provide a profit guarantee of at least RM14.8mil for the financial year ending Dec 31, 2018 (FY18) and RM20.5mil in FY19.

Pictureworks and its subsidiaries (PW Group) are principally involved in the provision of imagery capture and distribution platforms for theme parks, leisure and entertainment industries as well as licensing of imagery systems.

It has offices in Singapore, Malaysia, Hong Kong and China. The company is the official imaging service provider for some of the major international theme parks and attractions such as Kidzania Kuala Lumpur, Legoland in Johor, Singapore Flyer, Hong Kong Disneyland resort and Shanghai Disney Resort.

At present, the PW Group imagery system services are being offered in theme parks, water parks, tourist attractions, holiday resorts, and other attractions totaling more than 30 sites.

“The proposed acquisition also provides PUC with the opportunity to tap into the PW Group’s large database of customers to cross sell PUC’s recently launched social marketing platform called “Presto” which aims to benefit shoppers and sellers with digital tools, creative rewards and marketing solutions,” it said.

PUC is targeting to complete the acquisition in the second quarter of next year. It will also need to call for an EGM to seek shareholders’s approval for the proposed business diversification.