(Yicai Global) Sept. 12 -- Leo Group, a Chinese online marketing company that also makes pumps and garden equipment, has agreed to pay CNY2.34 billion (USD341 million) for a 75 percent in a digital marketing company that is less than three years old.
Leo Group will buy the shares from Suzhou MoKa Media's three shareholders, the Zhejiang province-based company said in a statement yesterday. The cash offer is 12 times MoKa's CNY260 million (USD37.8 million) profit forecast for this year.
Shares of Leo Group [SHE:002131] soared 9.8 percent today to close at CNY2.01 (29 US cents) each, while the benchmark Shenzhen Component Index lost ground.
Founded in 2015, MoKa runs a self-media account with user-generated content related to topics such as fashion, maternity, literature and dancing. The Suzhou-based firm has 280 million subscribers and provides marketing services to 2,500 customers in a host of sectors including cosmetics, food, health products and entertainment.
The contract states that the media firm's audited net profit after tax must be more than CNY260 million this year, CNY360 million next year, and CNY450 million in 2020. Leo plans to acquire MoKa's remaining shares within six months after the release of 2020's earnings report. The details of that deal will be determined later.
Editor: Emmi Laine