The destra philosophy is to grow both organically and via EPS accretive and strategically synergistic acquisitions. We will continue to pursue this strategy within destra and will share that strategy and experience with AEM for our mutual benefit
Regarding – AEM acquisition of DES media assets
Dear destra Shareholder,
Further to the announcement this morning that Artist & Entertainment Group (ASX:AEM) will acquire destra’s Digital Media assets, I want to clarify a number of points about the transaction.
I am a passionate believer in Digital Media and in the continued opportunity for destra’s Shareholders to participate in that sector. Our deal with AEM provides destra with increased flexibility and opportunity to increase our leadership position in Digital Media. The deal represents an increased focus on Digital Media by destra but it recognises that we have two quite separate core divisions – destra Corporation will hold your share of AEM incorporating the Digital Media assets while destra itself continues to build the operations of our web hosting and business communications business.
1) destra will become a 50% Shareholder in Artist & Entertainment Group destra has sold its Digital Media assets to AEM in exchange for AEM shares.
At completion of the deal, destra Shareholders, through destra Corporation Limited, will own around 50% of the issued capital of AEM. destra Shareholders, through destra Corporation Limited will be the largest shareholder in AEM and your interest in AEM will be represented on the Board of AEM by myself, your CEO and Carl Olsen, Chairman of your company.
Further to destra’s shares in AEM, Destra will also be granted a number of Options allowing destra Shareholders to participate in the continued upside of those assets. Further, the AEM core talent and entertainment businesses are synergistic with the destra Digital Media assets thereby allowing their value to be unlocked and maximised for the benefit of destra and AEM Shareholders.
2) Benefit of AEM success will flow to destra Shareholders
As a 50% Shareholder, we expect that destra Corporation and thereby its Shareholders will derive significant financial upside from the sale of its Digital Media assets to AEM both in terms of capital gain and ultimately dividend income. Further, while no timeline for the in specie distribution of destra Corporations’ shares in AEM has been determined, that option is one that will duly be considered by the Board of destra.
destra Shareholders, additionally, will now have a vehicle through AEM to increase their exposure to the Digital Media market, should they choose, a market with fundamentally different dynamics to the established earnings and track record of the Web Hosting business.
The destra philosophy is to grow both organically and via EPS accretive and strategically synergistic acquisitions. We will continue to pursue this strategy within destra and will share that strategy and experience with AEM for our mutual benefit.
Shareholders can be assured that your Board has approached the deal with AEM having considered the distinct advantages in terms of access to capital and operational efficiency of matching our distinct approach to the Web Hosting services and Digital Media markets respectively with distinct corporate structures. We found in AEM a partner who we feel we can work with to maximise the value of destra’s media assets for the benefit of all our Shareholders.
Thank you for your ongoing support of destra. I look forward to continuing to serve your best interests as an investor in our Company and through us now in AEM also.