Diversified print group Opus has signed an agreement with its owner Hong Kong company 1010 Group which will see 1010 acquire its Singapore arm COS Printers in a $19.3m deal.
The 1010 Printing company, which owns 62 per cent of Opus shares, is set to purchase COS Printers in a bid to ‘relieve’ Opus from the operating ‘distraction’ of the Singapore division, and enable to group to focus its efforts in Australia and NZ.
It will pay an initial $11m to Opus, and another $8m if it reduces its shareholding in COS to less than 50 per cent in the next three years.
The Hong Kong business acquired a large chunk of Opus’ in 2014. Opus entered into a strategic alliance with Singapore based COS Printing in 2010 together with another Hong Kong company Hung Hing. COS has been in operations for 38 years providing print and business services solutions to the publishing industry.
Opus assured shareholders business operations will not be affected. The deal is subject to a ‘non-compete’ agreement with COS for a minimum period of two years, effectively meaning Opus is withdrawing from Asia.
However in statement to the ASX the company says, “Opus Group’s accessibility to print for the world’s largest publishers will not be affected by this proposed sale of COS printers,” the statement reads.
“Instead, if completed, the sale of COS will relieve Opus management of the distraction of its undertakings and enable better focus on its printing businesses in Australia and New Zealand.”
Opus logged $115m revenue for 2015, but its flagship publishing division revenue dipped slightly to $94.9m.
The proposed acquisition comes soon after chief executive Cliff Brigstocke stood down from his nine year tenure, moving into a sales and marketing role, and executive chairman Richard Celarc assumed the position of CEO.
Celarc says further information about the intended sale will be sent out alongside notice for the group’s 2016 Annual General Meeting on April 6.
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