HONG KONG, July 27, 2017 /PRNewswire/ -- Goodbaby International Holdings Limited ("Goodbaby International" or the "Company", SEHK stock code: 1086, together with its subsidiaries, the "Group"), an international, vertically-integrated durable juvenile products company headquartered in China, is pleased to announce the acquisition of the Target Group, directly and wholly owned by Goodbaby China Holdings Limited, at a consideration of US$360,000,000 (equivalent to approximately HK$2,812,176,000).
On 24 July 2017, the Group entered into an agreement to purchase the entire issued share capital of Oasis Dragon Limited ("Oasis Dragon" or "Target Group"), where its core businesses consists of: (i) the product development, brand management and distribution of leading self-owned brands in maternity and baby-care products and apparel products; and (ii) one of the largest retail networks for MBC products in China, and a leading omni-channel sales platform that provides customers with its self-owned brands in maternity and baby-care products, apparel products and the Group's durable juvenile products.
The consideration for the acquisition is US$360,000,000 (equivalent to approximately HK$2,812,176,000), subject to adjustment. It will be satisfied as to US$120,485,816 (equivalent to approximately HK$941,187,000) by the payment of the cash consideration and as to the balance by the allotment and issue of the consideration shares, being 536,100,000 new shares, at the issue price credited as fully paid.
The Target Group designs, develops and distributes maternity and baby-care products and babies and children apparel products under the self-owned brands of "gb" and "Family by GB" and has a well-established omni-channel retail sales platform. According to the Frost & Sullivan Report commissioned by the Group, the Target Group was a leading brand in China's non-durable MBC products market by retail sales value in 2016, primarily attributable to strong product development capabilities coupled with well-established online and offline channels to distribute its products. The Target Group owned a comprehensive and highly penetrated online and offline retail network under self-owned brands comprising over 11 self-operated online and online key accounts' retail platforms, 182 online third party retailers, 977 self-operated stores located in shopping malls and department stores covering 148 cities in China as of 30 April 2017.
Since its listing, the Group has been focusing its business on the durable juvenile products and successfully transformed from an OEM-driven company into a multi-brand, global leading durable juvenile products company. Such achievements were the results of the successful acquisition of "Cybex" and "Evenflo" in 2014. The combination of the Group and the Target Group represents a unique opportunity for the Group to further implement its one-dragon, vertically integrated business model by broadening the Group's product portfolio, improving growth and profitability, further strengthening its penetration and capturing the growth opportunity in China's MBC products industry with self-operated retail network and ultimately interacting directly with end-customers.
Secondly, the Group has enjoyed leading market share globally for durable juvenile products with particular strengths in strollers and car seats. The Target Group conversely has developed strong product research and development capability and brand awareness for non-durable MBC products. As such, the combination of the Group and the Target Group will create a comprehensive and innovative product portfolio and significantly enhance the Group's product development, branding and distribution capabilities, and enable the Group to further consolidate the fragmented MBC products markets in China.
With rising disposable income, increasing awareness on product safety and quality and the favorable second-child policy, China's demand for high-quality MBC products from reputable brands has grown rapidly in recent years. It is critical for the Group to capture the vast growth opportunity in China through obtaining the omni-channel sales platform and enacting direct communication with end customers. The Target Group has a leading omni-channel sales platform for MBC products. Upon the acquisition, the control of the omni-channel sales platform will significantly enhance the Group's marketing efficiency and effectiveness, provide value-add service and convenient shopping experience to customers and enhance its competitive edge over other rivals.
In addition, the acquisition will allow the Group to quickly transform from a business that focuses on design, research and development, manufacture, marketing and sale of durable juvenile products into a fully-integrated business that encompasses a leading omni-channel sales platform for comprehensive MBC products among all online and offline retailers selling MBC products in China.
Lastly, the Target Group places significant emphasis on building relationships with end-customers through tailored and creative marketing strategies and strives to utilize various traditional, new and alternative media channels to reach-out to end-customers effectively. With the combination of the Group and the Target Group, the Group will be able to capture critical data and interactions directly with end-customers, and in turn provide better alignment and control over the end-customers' feedback and timely reactions to such feedbacks. Furthermore, by leveraging such interactions with end-customers, the Group would be able to build a consumer-oriented and brand-driven ecosystem in China.
Commenting on the acquisition, Goodbaby International's Chairman, Mr. Song Zhenghuan said, "The Group believes that such strategies are critical in today's new age of becoming a globally leading MBC products brand company, and is at a critical time to be enacted at this stage of the Group's development to take advantage of the current market growth opportunity and acquire the Target Group at an attractive valuation to the Group."
Goodbaby International's Chief Executive Officer Mr. Martin Pos commented, "Since its successful acquisition of Cybex and Evenflo in 2014, the Group has continuously invested in the transformation, in-depth integration and roll out of internationally managed management platform for further development and sustainable growth. As part of our continuous growing strategy, we believe that the acquisition will further broaden the Group's product portfolio and capture the robust growth in China's MBC Products market, allowing the Group to become an active and competitive player in the market of MBC Products."
About Goodbaby International Holdings Limited
Goodbaby International is one the world's leading global durable juvenile products companies, headquartered in China. We adopt a vertically integrated business model. The Group's core capabilities lie in research & development, design and quality manufacturing, branding, marketing and sales of juvenile products, such as strollers, children's car safety seats, juvenile household products (e.g. cribs, safety gates, high chairs and infant seats), as well as juvenile toy vehicles (e.g. stationary activity centers, tricycles, e-cars and scooters).
Goodbaby International has over 11,000 employees worldwide; we own seven research & development centers globally including Americas, Europe and Asia and manages sales, marketing and distribution offices in 11 countries. With this global presence, localized operations and strong capabilities in brand building, the Group has a leadership position in the juvenile goods industry. Every day, millions of parents count on the quality, reliability and performance of our products.
