The Asda UK business consists of 191 photo centres and 172 self-service kiosk sites and in 2015 saw unaudited sales of around £19.3 million and an unaudited loss of £3.4 million.
Serge Crasnianski, the chief executive of Photo-Me told investors: "This is an interesting opportunity to significantly expand our UK business in a strong set of locations and increase our market share in the digital photo printing market, which we believe has growth potential in the digital age.
"Photo-Me is the leader in its field with a wide range of attractive and innovative products which we plan to introduce into the Asda stores as soon as possible, and we believe will improve the level of trading and overall performance over the next two years and beyond."
Photo-Me will also operate the Asda-branded online photo-processing for at least 2.5 years and it believes the whole Asda photo business can be significantly enhanced in the medium term with Photo -Me's involvement.
Photo-Me will pay £3.35 million, subject to downward adjustment and it has also agreed to buy the inventory available at each photo centre and central consignment stock, estimated at £2 million, on completion, which is earmarked for October 31 this year.
Photo-Me expects the acquisition to be slightly dilutive to the earnings of the UK division in the current financial year to end April, 2017.
Thereafter, it expects it to add material revenue growth to its UK-based operations, and expects it to be earnings-enhancing in the medium term.