Photo-Me International has confirmed reports there are discussions taking place that could involve the sale of the company. Reports of the possible sale of the Surrey, England , firm have been published in a variety of European newspapers and internet sites since the first week of June.
PMI is the parent of Kis/Photo-Me Group, Grenoble , France , the subsidiary responsible for the firm's line of minilabs, kiosks and photo booths.
On June 5, reports in The Sunday Times (British) indicated that a Bahrain investment firm, Arcapita, was in talks to buy out Photo-Me. At that time, PMI, a publicly held company, released a statement which confirmed an approach and indicated that they had appointed a financial adviser in the matter.
The official June 5 statement said: “Photo-Me International plc (“PMI”), the digital imaging company, notes recent press speculation. PMI today confirms that it has been conducting a strategic review, which may or may not lead to an offer being made for the Company, and has appointed JPMorgan Cazenove as financial adviser in this matter. A further announcement will be made in due course.”
On June 11, the same publication reported that the American hedge fund, Och-Ziff, along with other private equity groups had expressed interest in Photo-Me. According to the story, “The American hedge fund believes that the introduction of identity cards could prove a boon to Photo-Me, which operates thousands of kiosks in 15 countries…”
Since the talk of the sale of PMI, according to The Sunday Times on June 11, the share price on the London exchange had risen by 33%, a rebound from a drop of 28% in January when it was announced the firm would not meet analysts' earning estimates.
An assistant to Serge Crasnianski, Photo-Me's CEO, a major stockholder and founder of KIS, would make no additional comment to PTN on the reports of a sale of the firm. As a public company PMI has to abide by strict rules relating to public information.
Nicolas Series, managing director of KIS Photo-Me Group, told PTN , “There is no change in the day-to-day focus of selling Photo-Me products while developing new customers and serving our existing ones.” He indicated that plans were ongoing for a press luncheon at photokina in late September at which time “many new products will be introduced.”
For legal reasons, he was unable to comment of the talks of a Photo-Me sale.
Kevin Donohue, president of Digital Portal, the U.S. distributor of Photo Me equipment, said that at this point “we are in the dark” as to what is happening.
The talks of a sale of Photo-Me could cause some unrest in the U.S. at a time when Photo-Me was starting to kick into high gear as a result of a contract to supply its DKS minilabs to the CVS Drug chain for 2006, a sales coup for the group. Coming at a time when Konica has closed shop and Agfa barely exists, the minilab marketplace is somewhat hypersensitive to any unusual activity that could impact the supply chain.
At 2006 PMA, Photo-Me held its first-ever big press conference and was extremely bullish about its future despite the fact that its minilab sales were behind due largely to Kodak's decision to discontinue selling minilabs around the world. Kodak represented about 20% of the firm's minilab business. New kiosk and minilab products were introduced, a new Americas sales operation staffed with high-profile leaders was kicked off, and expansion of world-wide distribution by capturing ex-Konica and Agfa distributors was ongoing.
James Park, owner of ColorTek Image Shop in Manhattan , has four Photo-Me DKS systems in his labs. “Yes, I heard about the news, but I have no idea as to what impact it might have on us. We are at the end of the information chain.” Another Manhattan user of the DKS minilab is Joel Paymer, owner of Cameraland. “I had not heard about it. My concern is how it would impact activities in the U.S. ”