L Capital Asia leads cornerstones for Asiaray Media's HK IPO
L Capital Asia, is participating as a cornerstone investor in Greater China out-of-home advertising company Asiaray Media Group’s Hong Kong IPO, which is targeting up to HK$772.2 million ($99.5 million).
The private equity firm, which is sponsored by French luxury goods conglomerate LVMH, will commit $20 million to the offering, according to a regulatory filing. This would give it a post-listing stake of between 5.02% and 6.02% in Asiaray, based on the indicative pricing range of HK$5.85-7.02 per share.
Asiaray is looking to sell 110 million shares in total and cornerstone investors - L Capital Asia plus an investment vehicle called - Shandong Peninsula have agreed to cover approximately one third of the offering. Their commitment of $30 million will translate into a 33.1-39.7 million shares, or a 7.25-8.71% stake.
Founded in Hong Kong in 1993 by Vincent Lam, who remains chairman, CEO and controlling shareholder, Asiaray made its initial breakthrough by securing exclusive concession rights to television advertising in Shanghai. The company now claims to be one of the largest privately-owned media companies in Greater China.
In 2013, it ranked fourth among all media companies in terms of advertising revenue from airports and metro lines. It has exclusive mainstream media concession rights at 25 airports in mainland China, four metro lines in Hong Kong and six in mainland China, and 360 billboards, the vast majority of which are in Hong Kong.
Asiaray reported revenue of HK$1.21 billion in 2013, up from HK$953 million the previous year. Net profit increased from HK$71.8 million to HK$166.8 million over the same period. For the six months ended June 2014, revenue and net profit were HK$612.1 million and HK$91.5 million, respectively.
Airport concessions account for 55% of revenue, led by contracts at 11 airports in Yunnan province as well as Hangzhou airport. The proceeds of the offering will be used for, among other things, the acquisition of media resources at the new airport terminal in Hangzhou as well as space on expanding metro networks in Wuxi, Zhengzhou and Ningbo.
BOC International is the sole bookrunner for the IPO.
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