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2014-01-28 / Corporate news

The Company Announces Acquisition of Leading European Juvenile Products Brand CYBEX

Expand Brand and Product Portfolios Complement Markets and Business Strength to Drive Future Growth

The company is pleased to announce the acquisition of a leading child safety and lifestyle brand established in Germany, CYBEX (“CYBEX”), which marks the Group’s first acquisition after its listing in Hong Kong in 2010.

On 27 January 2014, the Group entered into an Agreement to purchase the entire issued share capital of Columbus Holding GmbH (“Columbus Holding”), which is principally engaged in the design and sale of juvenile products under the “CYBEX” and “CBX” brands. The consideration for the acquisition is EUR70.7 million (equivalent to approximately HK$751.1 million), to be settled in cash as to the amount of EUR38.5 million (equivalent to approximately HK$409.1 million) and by the issue of 100,000,000 new shares as to the amount of EUR32.2 million (equivalent to approximately HK$342.0 million).

Established in Germany in 2005, Columbus Holding has presence across continental Europe, the United Kingdom and Hong Kong and utilizes a diversified multi-channel distribution network comprising brick-and-mortar retail stores and on-line retailers to distribute its products. As a globally renowned brand, CYBEX is recognized for its superior child safety features, cutting-edge design, comprehensive functionality and innovative technologies for products including car seats, strollers and baby carriers. For the year ended 31 December 2011 and the year ended 31 December 2012, Columbus Holding registered profit before taxation of HK$15.5 million and HK$49.2 million, respectively. Goodbaby International is committed to providing safe, innovative, fashionable, easy-to-use strollers and other durable juvenile products throughout the world. CYBEX’s marketing-driven and premium brand is complementary with Goodbaby International’s research- and product-driven model and is aligned with the Group’s strategy to reinforce its leadership status in the global juvenile products market.

In recent years, Goodbaby International’s car safety seats business has been expanding rapidly, and will remain one of the Group’s key development focuses. CYBEX’s expertise in this product category will further strengthen Goodbaby International’s business scale and influence in this area, as well as expand its product portfolio to include premium child safety car seats. This will, in turn, enable the Group to capture enormous business opportunities in the high-growth car safety seats market globally.

In addition, Goodbaby International and CYBEX can reap mutual benefits through each other’s established distribution networks in their respective markets. The acquisition would allow the Group to establish a direct distribution network and operations platform in continental Europe and the United Kingdom, creating another distribution channel to deliver Goodbaby International’s own products while enhancing the Group’s brand image overseas and increasing its market share in overseas markets. Likewise, CYBEX’s global position will be largely enhanced through access to Goodbaby International’s world-class engineering, manufacturing capabilities and strong Asian distribution, especially in its home market, China.

Furthermore, the Group shares the same entrepreneurial spirit and vitality of CYBEX’s team, and believes CYBEX’s branding capabilities in the international market will also add to the Group’s management strength. The Group is confident that the acquisition will drive its international growth and be complementary to its existing business strategy.

Mr. Song Zhenghuan, Chairman and CEO of the Group, commented, “This is truly an exciting time for us. The strategic acquisition offers distinct opportunities for both companies. Not only will it extend our product portfolio into premium car safety seats and reinforce our footing in Europe, we believe we can leverage greatly on CYBEX’s unique and extensive experience in branding and marketing. We look forward to cooperating with this outstanding brand as we gain stronger international presence to support our future growth overseas.”

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