IPVG to acquire 51% stake in animation firm

Publicly listed IPVG Corp. is acquiring 51 percent of Lucid Multimedia Tech to provide the company with a platform into the animation industry.

In a disclosure to the Philippine Stock Exchange (PSE), IPVG said they expect to complete the acquisition of Lucid within the first quarter this year, subject to the fulfillment by Lucid of certain pre-closing conditions.

Acquisition will be by way of purchase of primary or newly issued shares of Lucid, a profitable animation company that specializes in 3D graphics and animation. Company officials said they intend to pay for the acquisition from existing funds earmarked for “early stage investment opportunities.”

IPVG intends to acquire 10,509 shares of stock of Lucid for a total investment of P6.4 million. It explained that the shares will be acquired at a premium, the valuation being based on the trailing 12 months revenue of Lucid or at 7.5x earnings before interest, taxes, depreciation, and amortization (EBITDA).

The company explained that with other animation companies being acquired at multiples of 17.8x EBITDA, the acquisition of Lucid credits the corporation with a discount of 10.3x EBITDA as against market comparables, such discount being largely attributable to the synergies and value added by IPVG to Lucid and its business.

Lucid currently services the 3-D requirements of several companies in Fortune’s list of 500 Fast Moving Consumer Goods (FMCG), duty free shops in major urban retail centers/airports and other companies in the advertising industry.

Meanwhile, the IPVG board earlier authorized the company to sell all of its shares in IP Converge Data Center, which owns and operates data centers in the Philippines and in Singapore, to Viridiem Pte Ltd, a wholly-owned subsidiary of IPVG in Singapore.

The company was also authorized to sell all of its shares in IP E-Game Ventures, which operates its online games business, to IPE Global Holdings, a British Virgin Islands company which shall become a subsidiary of IPVG.

IPVG explained yesterday to the PSE that the subsidiaries restructuring involve a transfer of the ownership by IPVG in IP E-Game Holdings and IP Converge Data Center to off-shore companies which are or will be under the ownership and control of IPVG.

It said the sale of its shares in IP Converge Data Center and the rationalization of IPVG’s information technology and telecommunications structure into a new company based in Singapore (Viridiem Pte Ltd) will prepare Viridiem for significant developments especially in the provisioning of ecologically efficient data centers.

On the sale of IP E-Game Ventures, it noted that the rationalization of the corporation’s online games business will provide the latter with regional opportunities on the licensing and publishing of online games.

The IPVG board has also approved the equity restructuring of the company to wipe-out up to P400 million in deficit from the company’s additional paid-in capital

It pointed out that the wipe-out of the deficit in the books of account of the corporation, which was inherited by the present management during the reverse take-over of IPVG last 2004, will result in restricted retained earnings for the corporation, strengthen its financials, and eventually pave the way to declare dividends and other programs that will be beneficial to its shareholders.

SIt said the corporation will seek soon the approval of the Securities and Exchange (PSE) to undergo equity restructuring.