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LONDON - IG Design Group plc, a global leader in design and manufacturing for celebration and creative products, announced today that it has sold its Design Group Americas (DGA) division to HUK 168 Limited, a Hilco Capital group entity. The deal includes a nominal upfront cash payment of one US dollar and a contingent future revenue share.
DGA, which represents the Group’s operations in the US and includes supporting functions in India, Hong Kong, China, the UK, Mexico, and Australia, reported $500.3 million in revenue and a $4.9 million operating profit before tax for the fiscal year ending March 31, 2024. The division’s net assets as of September 30, 2024, were valued at $245.4 million.
The sale comes after DGA faced an increasingly difficult retail environment, declining consumer demand, and the impact of new trade tariffs in the US. The Board of IG Design Group believes the disposal is in the best interest of the Group and its shareholders, allowing it to exit a loss-making segment and focus on more profitable markets in the UK, continental Europe, and Australia.
Under the terms of the share purchase agreement, IG Design Group will receive 75% of any future proceeds from the sale or realization of DGA’s assets, with the buyer entitled to the remaining 25%. However, there is no guarantee that any such proceeds will be realized, and the Group may ultimately only receive the initial one US dollar payment.
The company’s existing asset-based lending facility in the US will be terminated upon completion of the transaction. IG Design Group is in the process of finalizing a new three-year financing agreement, expected by the end of June, with bridge financing provided by lenders in the interim.
The disposal is anticipated to result in a significant non-cash write-down of the Group’s investment in DGA, affecting the financial results for the year ending March 31, 2025. The publication of these results will be delayed, with a new reporting date to be announced.
Stewart Gilliland, Chair of IG Design Group, acknowledged the efforts of the DGA team and emphasized the company’s commitment to strengthening its international operations.
This move is seen as a strategic pivot to mitigate financial risks and concentrate on regions with stronger market performance. The information is based on a press release statement from IG Design Group plc.
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