Spackman Entertainment Group has entered into a sale and purchase agreement with independent third parties to acquire talent management agency, Constellation Agency, for $16.6 million.
The South Korean group intends to issue about 144.8 million new shares at $0.115 apiece for the acquisition. The purchase consideration of $16.6 million takes into account Constellation's unaudited net profit of US$1.2 million (S$1.6 million), and its unaudited net asset value of US$3.6 million as at Nov 30, Spackman said.
Constellation is mainly involved in the business of representing and advising South Korean artistes in overseas markets, including in South-east Asia and the United States.
Spackman believes the acquisition will allow it to leverage Constellation's marketing expertise and talent management platform to deliver integrated content production. In addition, it believes this is a "strategic fit to the company's existing operation" as it diversifies.
Separately, the group has entered into a share swap agreement with an existing shareholder, who is also the vendor of Spackman Entertainment's associated company, Spackman Media Group, which is incorporated in Hong Kong.
Under the deal, Spackman Entertainment will purchase 920,000 shares of Spackman Media at US$3 a share for US$2.76 million. This will increase its shareholding in Spackman Media from 29.12 per cent to 32.13 per cent.
To fulfil this purchase consideration, the group will issue about 32.4 million new shares at 11.5 cents a share, valued at US$2.76 million. The issue price is at a premium of 23.7 per cent over the group's volume-weighted average price of 9.3 cents as at Dec 21. When the deal is completed, the new shares will represent 5.92 per cent of the group's enlarged share capital, comprising 547.9 million shares.