12th Apr 2006 11:51
DSG International PLC12 April 2006 PR21/06 RNS For immediate, BST, 12 April, 2006 DSG INTERNATIONAL PLC ACQUISITION OF A CONTROLLING STAKE IN FOTOVISTA GROUP DSG international plc today announces that it has agreed to acquire acontrolling 75% interest in Fotovista Group, for a total cash consideration of€266 million (approximately £185 million). Headquartered in Paris, Fotovista isthe parent company of Pixmania, a leading European e-tailer of digitalphotographic and consumer electronic products. Pixmania, the core e-commerce operation, is the only pan-European e-tailer ofconsumer electronic products and trades in 25 European countries through bespoketransactional websites. Its operations cover all countries in which DSGinternational has a retail presence, with the addition of Austria, Belgium,Estonia, Germany, Holland, Latvia, Lithuania, Luxembourg, Portugal, Slovakia,Slovenia and Switzerland. All territories are served from a central warehouseand call centre in Paris. Pixmania is already a market leading e-tailer ofconsumer electronic goods in France, Italy, Spain and Portugal and the businessis growing strongly in all countries in which it has a presence. Fotovista's operations also include online digital photo services, a 250 storebased franchised photographic operation in France and specialist studio andportrait photography services in France and Belgium. As reported in the most recent audited consolidated financial statements (1) forthe year ended 31 March 2005 Fotovista's consolidated sales were €354.1 millionand underlying profit before interest and tax was €6.2 million. Gross assetswere €131.7 million. Unaudited management accounts for the year ended 31 March2006 show sales of over €450 million, of which 80% relate to online activities,and underlying profit before interest and tax of €7.6 million. Completion of the acquisition is subject to approval by the European UnionCompetition Authority and is expected to take place before the end of June.Fotovista will be consolidated into DSG international's accounts from completionand is expected to be earnings enhancing in the first year. Of the total proceeds payable on completion €155 million is payable to theprincipal shareholder, LMBO, in respect of their entire interest in Fotovistaand €36m is payable in respect of shares held by the founders and managers. Thebalance of €75m is payable in respect of a subscription for new shares inFotovista, the proceeds of which will be used to repay existing debt and tofinance growth opportunities. The percentage of Fotovista that DSG international will acquire on completion issubject to closing debt adjustments. The remaining interest in Fotovista will beretained by the founders, Steve Rosenblum and Jean-Emile Rosenblum, togetherwith other members of the management team (the "Fotovista minorityshareholders") who are expected to remain with the Group. Under the terms of theacquisition there is a mechanism to allow the Fotovista minority shareholders todispose of their shareholdings. In the event of certain financial targets beingmet and in the event of a sale by the Fotovista minority shareholders, suchshareholders will be entitled to an increase in their percentage ownership ofFotovista. John Clare, group chief executive of DSG international plc, said: "Thisacquisition brings into the Group an already fast growing, profitable and highlyrespected e-tailer of digital photographic and consumer electronics productswith established operations throughout Europe. This makes it the most attractiveonline electrical retailer in Europe today, and I am delighted to welcome theminto DSG international. We will be supporting Pixmania's growth plans with our buying, supply chain,service and back office infrastructures to enable it to become a very muchstronger pan-European business in a broader range of electricals and relatedproducts over the next few years. In most European countries e-tailing is in itsinfancy with highly promising growth prospects. The on-line systems and management skills that this acquisition brings into theGroup will be of significant benefit to all of our existing multichanneloperations. Last week I signalled our ambition to build a strong leadership position inEuropean electrical e-tailing. This acquisition represents a significant steptowards realising that goal." Steve and Jean-Emile Rosenblum, President and Chief Executive of Fotovistarespectively, said: "We are delighted to become part of such a successful andleading electrical retail group. Our talented and innovation-driven teams willfully embrace the e-commerce strategy of DSG international to become the leadingelectrical e-tailer in Europe." There will be a conference call for analysts at 1.00pm today, 12 April 2006. Thedial-in number is +44 (0) 800 953 1444 please quote call ID 7920448 Notes: (1) Prepared under French Generally Accepted Accounting Principles and usingIFRS presentational principles For more information about DSG international plc, please visit www.dsgiplc.com. Contacts: David Lloyd-Seed Director of investor relations +44 (0) 1727 205065 Hamish Thompson Director of media relations +44 (0) 1727 203195 / +44 (0) 7702 684290 Ian Hart Citigroup Global Markets +44 (0) 207 986 4000 - Ends - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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