As Teak Capital Sdn Bhd marches on with its divestment strategy, the Malaysian venture capital fund believes its following exits will likely be trade sales, rather than IPOs.
Without disclosing much, managing director Chok Kwee Bee told DEALSTREETASIA that the firm is working on divesting from most of the seven companies in its current portfolio.
“We are looking at divestment definitely, but we can’t talk about yet. The fund has one more year to the expiry and because any exercise will take at least three to six months, we have to start working on them,” she said after sidelines of Aemulus Holdings Bhd‘s launch of its prospectus last Wednesday.
Aemulus is the first IPO exit in the Teak Ventures fund. The automated test equipment design house will debut on the ACE Market of Bursa Malaysia on September 15.
“We won’t say there is no IPO, in the sense that if we could sell to a public company through a reverse takeover, we don’t know yet. But I think trade sale is more likely,” she said.
Chok said the firm is currently talking to other parties for trade sales. “It’s not that we want to divest, these companies still have potential but its due to the time frame of the fund we decided that we have to start looking at (divesting),” she commented.
She notes that given the impending fund expiry, Teak Capital will have to take stock of its divestments by the second quarter of next year (2Q16).
Teak Capital’s inaugural fund Teak Ventures is still invested in Youth Asia, an online crowd-powered marketing solutions provider, which has two units under it – Groupsmore and Says. Groupsmore was acquired by flash sale giant Groupon Inc in 2011 while Says merged with certain subsidiaries of Catcha Media Bhd in 2013 to form Rev Asia Bhd, listed on Bursa Malaysia.
Xentral Methods, which provides digital right management solution; fonYou, which provides cloud telephony applications and services to telecom operators; retail management solution provider Web Bytes and tertiary education search engine platform EasyUni.
Teak Ventures will remains a stakeholder in Aemulus post-IPO, although it decreases its shareholding by about a third from 9.74 per cent to 6.82 per cent.