Trading company Li & Fung is planning five acquisitions aimed at raising its profits and extending its reach in Europe.
The announcement of the deals scotched market rumours that the group had slowed down its pace of acquisitions, which had triggered fears of slower growth and pushed the stock price down.
In a four-hour meeting with about 50 analysts yesterday, the group said the five deals would expand its trading and distribution networks, and that it recorded revenue of US$660 million and a pre-tax profit of US$80 million last year.
Li & Fung chief executive Bruce Rockowitz (pictured) did not divulge how much the company would spend on the acquisitions but said these were valued at a price-earnings ratio of 6.5 times and would contribute to the group's bottom line by as early as the second half of this year.
'There is a myth in the market that we don't do acquisitions,' Rockowitz said in the webcast. 'Every president is focusing on smaller roll-up deals. We've seen many opportunities, which will continue in the second half of this year.'
Acquisition remained a key strategy to fuel the group's growth as it seeks to double its core operating profit to US$1.5 billion and build three pillar divisions - trading, distribution and logistics - by 2013, he said.
Of the deals in question, 'the most strategic' is for TVMania, which is the largest pan-European supplier of character products such as Hello Kitty and Mickey Mouse and will serve as a platform for Li & Fung to build its network across Europe.