Malaysia’s ACE Market-listed Rev Asia Bhd announced on Monday that it will acquire the digital media company iMedia Asia.
Rev Asia had, on August 28, entered into a share sale agreement with Catcha Investments Ltd and iCreative Asia Sdn Bhd, to acquire a 100% equity interest in iMedia for 10 million ringgit ($2.41 million), according to a filing to stock exchange Bursa Malaysia. Catcha Investments currently owns a 54% stake in iMedia, while iCreative owns the rest.
The acquisition will be realised through the issuance of 40 million ordinary shares of Rev Asia at an issue price of 0.25 ringgit apiece. The deal is expected to be completed by the first half of 2021, said the filing.
In addition to the purchase consideration, Rev Asia will pay Catcha Investments and iCreative an additional consideration, in proportion to their shareholdings, should iMedia’s consolidated profit after tax and minority interests (PATMI) for 2021 cross a certain amount.
The iMedia acquisition is part of Rev Asia’s regularisation plan required to prevent a delisting. “The proposed acquisition will allow Rev Asia to regularise its Guidance Note 2 (GN2) condition in order to maintain its listing status on the ACE Market of Bursa Securities,” the filing said. The GN2 condition requires a listed company to submit a proposal to acquire a core business, which will increase shareholder value.
The proposed deal is a related-party transaction as iMedia directors Patrick Grove and Lucas Robert Elliott are, by virtue of their interests in Catcha Investments, major shareholders and directors of Rev Asia. They are also directors and major shareholder of iMedia via their interests in Catcha Investments.
The regularisation plan comes with a proposed exemption for Catcha Investments, Catcha Group Pte Ltd, Grove and Elliott from the obligation to undertake a mandatory takeover offer to acquire the remaining Rev Asia Shares not owned by them, the filing said.
iMedia owns and represents some of the leading digital properties in the country with a reach of over 8 million Malaysians monthly. It is primed to capitalise on the immense opportunity of digital advertising in Malaysia and other key Southeast Asian markets, Rev Asia said in the statement.
“There are hundreds of independent digital media and advertising businesses in Malaysia that would be better under one unified roof where they can share technology, data, content, sales teams, and clients,” iMedia co-founder and CEO Voon Tze Khay said. “We aim to be that single digital home for Malaysian digital media properties. We are looking to invest in or acquire numerous companies in this space in both Malaysia and across the region.”