HONG KONG, March 13, 2011 /PRNewswire-Asia/ -- Qin Jia Yuan Media Services Company Limited (Stock code: 2366, hereafter referred to as "QJY" or "the Group") has announced that it has entered into an agreement for the acquisition of a 55% controlling stake of Clear Light Group Limited (hereafter referred to as "Clear Light Group"), a leading TV advertising agency in China, through a wholly owned subsidiary. Upon completion of the acquisition, the Group will significantly expand its TV advertising business into different parts of China, especially Southern China, and further strengthen its unique cross-business media platform.
According to the agreement, the total consideration of HK$45,000,000 consists of a cash consideration of HK$22,500,000 and HK$9,000,000 payable by way of issue and allotment of 5,890,438 new shares ("Consideration Shares"), representing approximately 0.70% of the existing issued share capital and the enlarged issued share capital. The Consideration Share was issued at a price around HK$1.5279, representing a premium of approximately 10.0% above the average closing share price of QJY in the 10 trading days up to and including 10th March 2011. The balance of the consideration in the sum of HK$13,500,000 payable in cash, to be financed by internal resources is to be settled within 13 months from the date of completion.
Clear Light Group is a leading TV advertising agency in China, primarily engaged in the sales and brokering of advertising for provincial and local television stations in Southern China. With the acquisition of the Clear Light Group, it is expected that the net sales of QJY's TV advertising business unit will increase significantly. Combined with QJY's existing exclusive TV station underwriting arrangements in Central China, QJY now provides broad geographic coverage to its advertising clients for TV advertising.
TV advertising is still the dominant medium for advertising in China, capturing more than 70% share of the entire advertising market with a strong annual growth rate of 15%. Growing sentiment amongst consumers in emerging markets is also a key driver for sustainable growth in TV advertising revenue. It is forecasted by Deloitte Global Services Ltd. that TV advertising spending will grow by 16% in China in 2011.
The acquisition is one of several strategic steps undertaken by QJY to expand its cross-media platform. Together with QJY's strengths in TV drama production and out-of-home LED advertising, QJY brings to its media and advertising partners a broad and unique set of media assets. QJY's recent awards of marketing and advertising contracts with Henderson Land and 3D Gold are evidence of the potential and uniqueness of QJY's cross-media advertising capabilities.
Dr. LEUNG Anita Fung Yee Maria, Chief Executive Officer of the Group, said, "The acquisition opens the door for the Group's strategic expansion into the lucrative advertising market in southern China. The Group would benefit from the cross-selling opportunities between the clients of QJY and Clear Light Group and further enhanced its uniquely positioned cross-media business platform. Through our expert management team of media professionals with decades of experience in China, QJY strives to expand its client base, increase sales and develop into one of the strongest cross-media players in the country."
About Qin Jia Yuan Media Services Company Limited (Stock code: 2366)
Founded in 1995 and listed on the Hong Kong Stock Exchange in 2004, Qin Jia Yuan is one of the leading enterprises engaged in a diversified, foreign-owned media business in China with leading capabilities in cross-media advertising sales, television content production and marketing services.
SOURCE Qin Jia Yuan Media Services Company Limited