Ann: VMT Acquires Remaining 50% Interest of Vmoto Soco Italy, page-11

Why Now?

While waiting for the Annual Report and all the notes attached which explain what lies behind the broader brush preliminary numbers I have been wondering what drove the decision to bring forward the Acquisition of the 50% of VmotoSoco Italy

We can but speculate.

* As the valuation of the distribution business likely continued to be an agreed multiple of EBITDA its logical that it would happen soon after audited accounts for the JV were finalised.

*The strategic objectives as stated in the release rely on Vmoto providing financial support to grow the JV distribution business and Directly employ Castiglioni and Malone to lead the European Headquarters of Vmoto based in Milan . It therefore seems to make good sense to own the whole business rather than to provide financial support to build value for the JV partners.

*The flip side which allows everyone to be a winner is I guess they get paid in VMT shares valued at 15 cents.


"The key strategic objectives and rationale for the acquisition of remaining interest in VSI are:
• Maximising the value of our Italian operations by facilitating increased investment into financial and stock
support to our Italian dealers to meet increasing local demands;
• Streamlining the supply and distribution processes to increase efficiency in delivering the products to a
growing dealer and sales network;
• Cost synergies and savings through reduction of logistics costs, stock holding costs, parts sourcing and
reduction in other operating costs;
• Freeing up Milone and Castiglioni's time from VSI operations to enable focus on creating strategic business
development and opportunities, and to increase value for Vmoto Group; "