Case Study: Sell Media and Advertising Company Serving Singapore and Regionally
The Media & Advertising Company has billboards over South East Asia and China. For China, the rental of billboards from Airport to the main city is contracted for 10 years. South East Asia covered Indonesia, Malaysia and Thailand, Vietnam plus local, Singapore.
Besides billboard, the company is also doing advertisements with Straits Times and LianHe Zaobao (chinese newspaper for morning and evening). These advertisements are recruitment advertisements, buyers advertisements, congratulations advertisements. Singapore Press Holdings (SPH) owns all these newspapers as well as magazines. Moving advertisements would be taxi cabs and bus panels.
The Buyer is from the UK (United Kingdom) and contracted the company for their interest in their presence in the Asian region. After a few meetings, they expressed that they would like to purchase over the billboards. The Finance statement would need to be splitted into two business units. On the contractual obligations with all billboard-owners. the UK company has to buy over the whole company including the registration and the logo of the seller.
After much valuation and a 5-year business plan, both parties agreed to work on details of transfer of various countries. For Singapore, the buyer started to select the sites that they prefer. The seller would have to stay with Buyer over 12-month under the payroll of Buyer as the post of General Manager reporting to the Chairman in UK. Meanwhile the Buyer recruited a local Singaporean Assistant General Manager reporting to the Seller (As appointed GM for one year). The Buyer may request to extend the Employment for another 12 months. The Buyer explained the rationale for such arrangements.
The first site to transfer all billboards was in China. After fully having settled these China cities, the buyer decided to change the company’s name to use their UK company’s name and logo. This took place in Singapore. The balance of the businesses that was with the seller who would also change name to reflect their new direction in Singapore, Malaysia and Indonesia only. Other counteries, the seller withdrew their interest.
The M&A process took six months for the initial scope and legal agreement. The buyer further agreed to borne 50% of all fees as they took the liberty to select what they would like to acquire. All staff were retrenched and paid according to the provision in the Employment Acts (EAs) under the Ministry of Manpower (MOM). MOM was involved to ensure smooth transaction with good labour relations. The retrenchment sum was exempted from the personal income tax of every retrenched employee.