Global Market Group Ltd Acquisition (3908U)

TIDMGMC

RNS Number : 3908U

Global Market Group Ltd

15 October 2014

Global Market Group Limited

Acquisition of the business of Globalmarket Logistics Co., Ltd

Global Market Group Limited ("the "Company" or "GMG") (AIM:GMC), a leading manufacturer-to-business ("M2B") e-commerce service provider dedicated to connecting manufacturers in China with buyers all over the world, is pleased to announce that it has agreed to acquire certain of the trade and assets of Globalmarket Logistics Co., Limited. ("Globalmarket Logistics").

Background to the Acquisition

On 15(th) October 2014, the Company's wholly-owned subsidiary, Guangzhou Long Xiang Supply Chain Management Company Limited ("Long Xiang") entered into an agreement with Globalmarket Logistics pursuant to which Long Xiang has agreed to acquire the logistics business, customer contracts and other assets of Globalmarket Logistics (the "Sale Assets"). The Company will acquire none of the account receivables, deposits, creditor's rights and other liabilities of Globalmarket Logistics.

Globalmarket Logistics is a company incorporated in the PRC and principally engaged in the logistics and freight forwarding business. Globalmarket Logistics was part of GMG before it was divested in 2010 and has been independently managed since 2010. The owners of Globalmarket Logistics are the brothers of David Ling, the chief executive officer of the Company. The aggregate consideration for the Sale Assets, which will be paid in cash at completion, is RMB 3,010,653 (equivalent to GBP 299,234, exchange rate: 10.0612). The consideration payable could increase to RMB 3,250,653 (equivalent to GBP 323,088, exchange rate 10.0612) after completion if certain events relating to employees and leases occur. Completion of the acquisition is anticipated to occur within 20 days of the signing of the agreement.

In addition, Globalmarket Logistics has agreed to provide operational assistance and support to Long Xiang for a period immediately following completion of the acquisition to enable the smooth transition of the operation of the Sale Assets to the Company.

Based on independent third party reports on Globalmarket Logistics, the net profit of Globalmarket Logistics for the financial year ended 30 June 2014 was RMB 1,094,782 (equivalent to GBP 108,812, exchange rate: 10.0612) and the value of the business of Globalmarket Logistics is RMB 3,772,000. The consideration payable is in line with the value of the business unit as assessed by an independent third party valuer.

Reasons for and benefits of the Acquisition

The Company's directors consider the acquisition a further step towards building and promoting the Company as a global supply centre. The trade and assets of Globalmarket Logistics will support the development of the Company's new "small order transaction" service, to be branded as "Snowball", that consolidates small buyer orders so that they can be accepted by manufacturers with minimum order quantity (MOQ) requirements.

Related party transaction

Under the AIM Rules, the acquisition is a related party transaction as the majority shareholder of Globalmarket Logistics is also a director of one of the Company's subsidiaries. The Company's directors consider, having consulted with Grant Thornton UK LLP, the Company's nominated adviser, that the terms of the acquisition are fair and reasonable insofar as the Company's shareholders are concerned.

About Global Market Group Limited

Global Market generates revenues by operating the online portal www.globalmarket.com that connects high-quality manufacturers in China with buyers from all over the world. GMC manufacturers listed on the portal with "GMC" logo undergo independent quality audits conducted by Germany's respected TUV Rhineland group ("TUV") to gain Global Manufacturer Certificate (or "GMC") certification, assuring international buyers they have met demanding and independently-assessed certification standards, thus reducing risk, building trust, and providing a convenient and inexpensive route for manufacturers to access an international buying audience. Manufacturers pay to use the web portal, and international buyers are offered free access.

For further information, please visit www.globalmarket.com or contact:

David Ling/ Cheandy Hu/ Mophy Fan

Global Market Group Limited: [phone]

Philip Secrett/ Maureen Tai/ Jen Clarke

Grant Thornton UK LLP, Nominated Adviser: [phone]

Martin Davison

Westhouse Securities Limited, Broker: [phone]

Allan Piper/ Jiang Lei

First City Public Relations: [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

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