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CSS Stellar sells US business

08.01.08 Alison Flood

PFD owner CSS Stellar has disposed of its 75% holding in US brand design company GEM Minneapolis as part of its strategy to focus on core businesses. The disposal, which will bring CSS $1.8m, is a transfer to Studio One, the 25% minority shareholder in GEM Minneapolis, of GEM's net third-party assets, goodwill and trade marks.

The value placed on the ongoing business is $2.4m. Studio One is paying CSS $1.8m in total for its 75% stake, paid by US$1.1m in cash on completion, plus a further $700,000 by way of a promissory note payable in cash in three annual instalments between January 2009 and January 2011.

CSS said in a statement this morning that "as part of its strategy to focus on core businesses", it decided that "the nature of the business of GEM Minneapolis, in addition to its geographical location, means that it is no longer central to the Group's future strategy".

As a consequence of the transfer of the net third-party assets, CSS will write down by way of impairment the carrying value of its investment in GEM Minneapolis by around £3.6m in its 2007 accounts. CSS said the write down was a non-cash accounting entry and had no impact on the Group's cash position.

GEM Minneapolis is a brand design and packaging business based in Minneapolis.

CSS Stellar Alison Flood

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