Spackman signs MOU to buy movie equipment firm
Singapore
SPACKMAN Entertainment Group on Monday announced a non-binding memorandum of understanding (MOU) with an independent third party, Kim Jun Young, for the proposed acquisition of Frame Pictures, a movie and drama equipment leasing business in Korea.
Mr Kim, a veteran director of photography, founded Frame Pictures in 2004. Charles Spackman, executive chairman and CEO of Spackman, said that the potential acquisition of Frame Pictures is part of its efforts to create a more diversified and consistent revenue stream, which has thus far been very reliant on the box office performance of its movies.
The acquisition is also likely to help Frame Pictures secure more film project deals, including from Spackman's own projects in some cases, he added. Frame Pictures has undertaken projects in 12 films produced by Spackman's subsidiary, Zip Cinema. In 2015, Frame Pictures became the first Korean firm to offer 4k resolution post-production services.
Spackman in turn will continue to explore similar strategic acquisitions to diversify its income channels.
The MOU outlines the consideration payable by the company, which Spackman did not announce but said that it will be fulfilled in cash, other assets owned by the company, the issuance of new shares, or a combination of these.
The company stressed that this transaction is at a preliminary stage and the entry of a definitive agreement will be subject to due diligence and shareholders' approval, if needed. The exclusive period of the MOU is until April 30, 2017.
Spackman's shares ended Monday trading 0.2 cent lower at S$0.168.
