Asda sells its UK photo division to Photo-Me
With the acquisition expected to complete on 31 October, the business will be managed by Photo-Me under a ten-year concession. As part of the acquisition the employees of the division will transfer across to the Photo-Me group.
Photo-Me will also operate the Asda-branded online photo-processing offering for a minimum of two and a half years.
The company said the acquisition will enable it to expand its estate in locations offering convenience and high footfall, and will also enhance its online photo-processing offering.
Serge Crasnianski, chief executive of Photo-Me, said: “This is an interesting opportunity to significantly expand our UK business in a strong set of locations and increase our market share in the digital photo printing market, which we believe has growth potential in the digital age.
“Photo-Me is the leader in its field with a wide range of attractive and innovative products which we plan to introduce into the Asda stores as soon as possible, and we believe will improve the level of trading and overall performance over the next two years and beyond.”
The two companies have agreed a purchase price of £3.35 million, subject to downward adjustment in certain circumstances. Photo-Me has also agreed to buy the inventory available at each photo centre at the date of completion, as well as central consignment stock, estimated at £2 million. The total consideration to be paid is currently estimated at £5.35 million and is capped at a maximum of £6 million.
Under the arrangements, Photo-Me will also pay Asda periodic commission payments, negotiated on commercial terms, based on the turnover, as well as business rates and costs of utilities.
In 2015, the photo division generated unaudited sales of circa £19.3 million and made an unaudited loss of £3.4 million.
Photo-Me said it believes that the division’s turnover can be raised materially by having a specialist operator running the business. It also expects that a combination of reconfiguration of layouts, upgrading of equipment, as well as the introduction of new concepts and designs into the sites will make the business more appealing to customers.
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