IMAGI subscribes shares in Sino Light Enterprise

The move eyed to further expand “Pleasant Goat and Big Big Wolf” branded business and to broaden revenue sources.

IMAGI International Holdings Limited (“IMAGI”), announced the subscription of shares in Sino Light Enterprise Limited (“SLE”), the licensee of the “Pleasant Goat and Big Big Wolf” brand to manufacture and distribute children’s wear, for a consideration of HK$36.4 million, via its indirect wholly-owned subsidiary Toon Express International Limited (“Toon Express”). On 13 July, 2011, Toon Express has agreed to subscribe for certain shares in SLE for HK$36.4 million, of which HK$9.1 million will be settled in cash and HK$27.3 million by way of certain business support services to be provided by Toon Express to SLE. SLE has also granted an option to Toon Express to subscribe for additional shares in SLE.

SLE is currently 55% indirectly owned by Sandmartin International Holdings Limited (HKSE Stock Code: 482), and the remaining 45% is indirectly owned by Sino Light Group Limited. Upon the completion of the subscription, Toon Express would own 20.63% in SLE. Toon Express’s shareholdings in SLE would further increase to 29.58% if the option to subscribe for additional shares is exercised upon the completion of the subscription.

SLE is principally engaged in the design, manufacture, sales and distribution of apparel for children from 0 to 14 years old under the brand of “Pleasant Goat and Big Big Wolf”, a popular children’s cartoon TV series as well as the leading characters of three feature-length films to date in mainland China. In November 2010, SLE has entered into a non-exclusive license agreement with an affiliate of Disney Enterprises, Inc., the exclusive global master licensee of “Pleasant Goat and Big Big Wolf”, to manufacture and distribute, through establishing chain stores, children’s apparel under the brand for three years in mainland China. SLE has an option to renew the license for another three years, according to an IMAGI report.

IMAGI’s chairman Francis Leung Pak To said, “We are glad to secure another investment which will effectively promote and enhance the brand appeal of “Pleasant Goat and Big Big Wolf” in China.

Through the nationwide retail network and the distribution and sale of the branded products, we expect to unleash further growth potentials of the “Pleasant Goat and Big Big Wolf” brand and boost the core consumer products licensing business of the Group.”

Mr Soh Szu Wei, CEO of IMAGI, said, “The subscription enables Toon Express to participate in the retail apparel business under the “Pleasant Goat and Big Big Wolf” brand and to further boost the brand’s exposure. SLE targets to open over 1,100 retail outlets including flagship stores, shops-in-shop and department store corners nationwide in three years. The first "Pleasant Goat and Big Big Wolf" flagship store is scheduled to open in September 2011. The establishment of the nationwide retail network would enhance direct interactions of the brand with consumers. By leveraging on the popular “Pleasant Goat and Big Big Wolf” characters, we believe the Group’s consumer products licensing business will benefit from the fast-growing animated entertainment business and children’s wear market in mainland China”.

As part of the consideration for the subscription, Toon Express will provide business support services in the scope of human resources, legal support, marketing and IT to SLE for three years.