LONDON, UK: ME Group International plc (LON: MEGP), a leading instant-service vending equipment group, has announced the acquisition of the automated-photobooth business owned by two subsidiaries of FUJIFILM Corporation in Japan.

The binding conditional agreement, entered into by ME Group Japan K.K. (“ME Group Japan”), is expected to further expand the company’s operations in Japan and strengthen its position in the photobooth market.

The total consideration for the transaction is approximately £5.5 million (Japanese Yen 996 million), with a possible reduction subject to an adjustment mechanism outlined in the agreement. ME Group anticipates funding the transaction through a new local loan facility or using its existing cash resources if necessary. The completion of the transaction is expected to take place by the end of September 2023.

Serge Crasnianski, Deputy Chairman and CEO of ME Group, expressed enthusiasm for the expansion in Japan, stating that it aligns with their strategic goals of consolidating their leading market position and making selective acquisitions. He highlighted the robust demand for photo ID in Japan, driven by the government’s social security and taxation photo ID card scheme. Crasnianski emphasized that the acquired photobooths would be integrated into ME Group’s operations, benefitting from operational synergies and establishing the company as the leading operator in the Japanese photobooth market.

The photobooths being acquired are traditional photobooths located in high-footfall areas such as travel hubs and shopping centers throughout Japan. Over the previous three financial years, the photobooths generated an average annual profit before tax of approximately £0.29 million (Japanese Yen 45 million). As of 31 March 2023, the gross assets subject to the transaction were valued at £2.98 million (Japanese Yen 469 million).

ME Group Japan has entered into a binding conditional absorption-type company split agreement with the sellers, FUJIFILM Imaging Systems Co., Ltd (“FFIS”) and N&F Techno Service Co., Ltd. (“NFTS”), both wholly-owned subsidiaries of FUJIFILM Corporation. The completion of the transaction is subject to standard conditions and the fulfillment of legal procedures in accordance with Japanese law.

Upon completion, ME Group expects the transaction to be earnings-enhancing in the financial year ending 31 October 2024. If all the photobooths are acquired, the Asia Pacific revenue is projected to increase by 20 to 30 percent, adding approximately £2.2 million in profit before tax in the same period. ME Group Japan is poised to become the market leader in Japan, according to the company’s directors.

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