Spackman to acquire company that leased equipment for ‘The Legend of the Blue Sea’

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SINGAPORE (March 15): Spackman Entertainment Group has entered into a sale and purchase agreement to acquire a 100% interest in Korean equipment leasing company Frame Pictures from its owner, for a cash consideration sum of KRW 900 million (S$1.1 million).

Additionally, the transaction will include the group’s payment of 497,250 shares from its partially-owned associated company, Spackman Media Group (SMG), to the unnamed vendor, which is only referred to by Spackman as an “independent third party”.

The consideration shares amount to about 1.63% of SMG’s total share capital. Upon completion of the acquisition, Spackman’s interest in SMG will therefore be diluted from 24.53% to 22.9%.

Frame Pictures was established in 2014 by Kim Jun-young, a veteran director of photography.

The company has provided camera and lighting equipment for the production of drama and movie projects in Korea, including The Legend of the Blue Sea (2016) featuring Jeon Ji-hyeon and Lee Min-ho, as well as Veteran (2015), a Korean box office topping film starring Yoo Ah-in.

In its Wednesday filing to the SGX before the market opened, Spackman says the acquisition of Frame Pictures, a profitable business, is in line with its strategy of “making acquisitions of companies involved in the entertainment industry that can financially and strategically complement [its] core operations”.

It also believes the acquisition will help the group to “create a more diversified and consistent revenue stream which has been significantly reliant on the box office performance of its movies”.

Lastly, Spackman says it is “strategically positioned to further enhance the performance of Frame Pictures, especially in securing more film project deals, including its own in some cases”.

With the proposed acquisition, the group projects its losses for FY16 will narrow to US$1.5 million (S$2.1 million), from US$2.2 million previously, bringing loss per share to 0.37 US cents, as compared to the 0.56 US cents announced for FY16.  

(See also: Spackman Entertainment plans placement to raise S$5.95 mil)

Shares of Spackman closed 1.2% lower at 16 Singaporean cents on Tuesday.