[Auckland, NZ; September 27, 2016] — Global film software company Vista Group International Limited, its Chinese subsidiary, Vista Entertainment Solutions Limited, Shanghai (Vista China), and Beijing Weying Technology Co. Limited (WePiao) have announced the completion of a new joint venture agreement to take advantage of the expanding film market in China. In addition to its participation in the Chinese business, WePiao, which is an affiliate of Tencent Holdings Limited, will subscribe for up to 2.0% of new shares to be issued in Vista Group at the volume weighted average price of Vista shares in the month preceding this announcement.
Vista Group will provide the new venture with the distribution rights to Vista Cinema, Veezi, Movio, MACCS and Numero. This is expected to facilitate the acceleration of Vista’s growth strategy in China for its core cinema management product Vista Cinema and its cloud based product, Veezi, which is ideally suited to the large number of smaller cinemas in China. It will also provide a launch platform for Movio, MACCS and Numero software in what is the world’s fastest growing cinema exhibition market.
The ticketing market in China is led by large third-party internet companies selling via the internet, mobile applications, and other sales channels. WePiao has smart phone ticketing embedded in its WeChat messaging app, which has more than 600 million active users, mainly in China. Vista Group saw WePiao, and its relationship with WeChat and Tencent, as strategic in terms of internet sales, resource capability, and cinema market penetration. The joint venture is expected to increase Vista China’s capacity to service growth in the China market and it is consistent with Vista Group’s continued path toward developing innovative business solutions that align with the changing demands of the global cinema industry.
WePiao is also involved in other aspects of the film industry, including distribution, and data collection, which was attractive for Vista Group products such as MACCS, Movio, and Numero. Vista saw the opportunity to utilize its products, particularly data collection (Movio, Numero), in a way that combined its customers’ and WePiao’s data access to produce market data on China that would be of use and value to other international markets.
The transaction will generate cash to Vista Group in the first year in excess of circa NZ$38 million. This includes:
– the value for the sale of shares in Vista China
– an initial upfront fee for the distribution rights
– three years of maintenance fees
– the value for the 2.0% of new shares issued in Vista Group.
“Vista has been committed to the China market for some time and this combination will enable us to support and grow our existing cinema customer base, provide a wider range of services to the China market and ensure we can become a significant supplier to the fastest growing film market in the world,” said Vista Group CEO Murray Holdaway, excited by the opportunities that the new venture will create. “The new venture with WePiao and its corporate owners WeChat and Tencent, through their market position, is expected to enable us to achieve growth that Vista by itself could not.”
“It is very good to partner with the world’s leading supplier of software in the film industry,” said WePiao CEO Lin Ning. “We are looking forward to bringing our Chinese market capability and influence to the business in China, to accelerate the growth in the fast growing film and cinema sector of the Chinese economy. We also look forward to potential cooperation with Vista Group in other markets in the future.”
On completion Vista Group will hold 40% of the new venture and it will be equity accounted as an associate company.