Tom Group Limited · HKEX:2383
Tom — TOM.COM — Merger or Acquisition (December 2001)
18 slides from Tom's merger presentation, Dec 11, 2001
Slide 1: Consolidated the Taiwan Print Market: Positioning for Expansion into China
TOM.COM LIMITED Consolidated the Taiwan Print Market Positioning for Expansion into China 11th December 2001 Hong Kong
Slide 2: Cross-Media Strategy Reinforced by Growing Print Division
Cross-Media Strategy Reinforced by Growing Print Division Cross Telecom Media VAS Print Online Sports Outdoor No. 1 No. 1 Most financially sports profitable performing marketing outdoor online company media operator in China network in in China China Sharp Point No. 1 Chinese print media group in Gr
Slide 3: Highlights of the Transaction
Highlights of the Transaction Investment § TOM to acquire a majority interest of up to 100% in Business Weekly Consideration § NT$1,450 million for the profitable operations which TOM is buying § NT$200 million for operations in the investment stage which TOM has an option to acquire Investment Stag
Slide 4: Profit Guarantee
Profit Guarantee Escrow against profit guarantee § NT$262.5 million (NT$212.5 million TOM shares + NT$50 million IPO shares) in escrow pending profit performance Year NT$'M HK$'M 2001 Targeted pre-tax profit 125.0 28.1 2002 Targeted pre-tax profit 145.0 32.5 4
Slide 5: Option to Acquire
Option to Acquire § The investment stage operations – E-Business Weekly, To’Go Publishing, Sunbright Publishing and Abovewebs.com – will not be acquired by TOM initially § TOM has the option to acquire the investment stage operations, conditional upon certain performance targets being achieved for 2
Slide 6: Valuation Analysis
Valuation Analysis Effective adjusted consideration Adjustment NT$'M HK$'M Consideration 1,650.0 370.3 Cash and cash equivalent# (299.0) (67.1) Consideration set aside for investment (200.0) (44.9) stage operations Effective adjusted consideration 1,151.0 258.3 # Cash, short-term investments and pro
Slide 7: Additional Rationale
Additional Rationale Attractive Price for a Mature & Leading Business § A publishing company initially incurs significant cash outlay amounting to several years of losses before breaking even § Business Weekly has already matured into a sustainable, profit-making publisher § An authoritative Busines
Slide 8: Introduction to Business Weekly
Introduction to Business Weekly § Business Weekly is Taiwan’s leading magazine publisher with a 14-year operating history § Its flagship title, Business Weekly, is Taiwan’s best-selling business magazine § Leading brand effect: significant market share in advertising and high entry barrier § The Bus
Slide 9: Business Weekly's Leading Titles
Business Weekly’s Leading Titles Circulation per Category Magazine Name Launch Date Frequency issue Business Business Weekly Sep 1987 108,000 Weekly e-Business Weekly # Sep 2000 75,000 Weekly Lifestyle Marie Claire Mar 2001 60,000 Monthly Citta Bella Jun 1984 60,000 Monthly Health Mom Baby Mar 1987
Slide 10: A Profitable Track Record
A Profitable Track Record NT$'M HK$'M 1999 2000 1999 2000 Revenue 491.5 637.3 110.3 143.0 Profit before tax 43.1 177.1 9.7 39.7 PBT margin 8.8% 27.8% 8.8% 27.8% 10
Slide 11: TOM Print Media Group Structure
TOM Print Media Group Structure CHINA NATIONAL PUBLICATIONS IMPORT & EXPORT CORP (CNPIEC) 50% 52.89% 100% 100% 70% 30% YAZHOU HOME MEDIA SHARP POINT BUSINESS OTHERS: JV ZHOUKAN GROUP WEEKLY • Import & • Mainland distribute Chinese TOM print businesses media 11
Slide 12: The Best Print Media Management Team in the Chinese-Language World
The Best Print Media Management Team in the Chinese- Language World Jan Hung-tze, CEO of PC Home & Wen Xiao Fan, General Manager of Chairman of Cité CNPIEC Information Technology § A 27-year media veteran of § 15-year experience in publications publishing, music & film production import & export in
Slide 13: Step 1: Consolidation Completed
Step 1: Consolidation Completed § TOM Print Media Group has a 30% – 40% market share in the consumer magazine categories in Taiwan § A portfolio of 40 magazines covering IT, business and lifestyle – categories which represent over 60% of Taiwan’s total magazine market § 8,000 book titles across a sp
Slide 14: TOM Print Group Attains Category Leadership
TOM Print Group Attains Category Leadership Category Leading Titles Annual Circulation Publisher IT PC Home 1,500,000 PC Home PC Office 960,000 PC Home PC Shopper 900,000 PC Home Download 900,000 PC Home PC Gamer 540,000 PC Home iTWeekly new PC Home Business Business Weekly 5,616,000 Business Weekly
Slide 15: Step 2: Integration Underway
Step 2: Integration Underway Restructuring § Consolidate common functions into central platform § Leverage increased bargaining power to re-negotiate terms with suppliers and distributors § Streamline staffing § Adopt international best practices 10% point Y-o-Y margin improvement in the initial PC
Slide 16: Step 3: Accelerate Chain of Acquisitions in China
Step 3: Accelerate Chain of Acquisitions in China Leverage China National Publications Import & Export Corp (CNPIEC) § 50-year domestic market knowledge • 90% share in China’s publications trade - newspapers, magazines, books, and digital items • Integrated publishing, printing and distribution plat
Slide 17: Step 4: Spin-Off Print Media Group
Step 4: Spin-Off Print Media Group Publishing groups with a portfolio of titles in expanded geographic locations command higher multiples than publishers of single or few titles in single territory Group Portfolio EV/EBITDA Publisher Single / Few Titles EV/EBITDA Pearson Portfolio of publishing 15.7
Slide 18: Greater China's Leading Publications
Greater China’s Leading Publications 18