Company Business

Sky Dragon Group (300063 A-Share listed) Taking over Zoom Interactive – Accelerate Digital Marketing Industry Consolidation

Digital marketing is an emerging industry with rapid growth. However, the industry is highly fragmented, and companies’ life cycle within the industry is generally short due to lack of...

  • Digital marketing is an emerging industry with rapid growth. However, the industry is highly fragmented, and companies’ life cycle within the industry is generally short due to lack of scale.Therefore, companies who have expansion capital and can be the first to consolidate other players would establish a firm dominate position in the market.
  • In Feb. 2015, ZZ Capital invested RMB 260m in Zoom Interactive for 20% equity stake. Zoom Interactive is China’s top three digital advertising company for search engines.
  • Shortly after ZZ Capital made the investment, it found Sky Dragon as a perfect business partner, as it’s a publicly traded industrial manufacturer eager to move into digital advertising space. ZZ Capital facilitated the 100% acquisition of Zoom by Sky Dragon, where ZZ Capital has exchanged its holdings in Zoom into Sky Dragon’s shares. In order to benefit from this long term partnership, ZZ Capital also increased its holding in Sky Dragon by RMB 107m afterwards. ZZ Capital held a total of 8.63% of shares in Sky Dragon, becoming the third largest shareholder of the company.
  • In Nov. 2015, the listed company completed Zoom Interactive’s share transfer, and issued new shares afterwards, which in total were 291million shares, and the market capitalization was RMB 12.6bn.
  • The market capitalization of Sky Dragon Group was RMB3.5bn before ZZ Capital’s investment. It increased 139% to RMB8.354bn by 30th Jun. 2016.
  • ZZ Capital will continue to work with Sky Dragon to further consolidate the industry.

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