Singapore-listed Artivision Technologies has agreed to buy local fintech firm MC Payment for a minimum of S$80 million ($59 million), the companies announced, in what will be amongst the largest exits amongst startups in this space in the city-state.
Following the announcement, the Artivision stock surged on the SGX on Wednesday. At the time of writing, it was trading at 1.9 Singapore cents, up 11.76 per cent.
MC Payment, which had earlier this year taken a controlling stake in Genesis Payment Solutions (Genesis) that is licensed by Alipay to acquire merchants on its behalf, is a leading provider of omni-channel and omni-payment solutions in the Asia Pacific region, with presence in Singapore, Malaysia, Hong Kong, Thailand, Indonesia, Australia and Cambodia. Its strategic partners in the region include Cambodia’s Soma Group, Sri Lanka’s Frostaire and Indonesia’s Sinar Mas Group.
The deal will see Artivision Technologies also buy out the convertible bonds of MC Payment, which consist of Series B Bonds and Series C Bonds with an aggregate principal value of S$5.5 million with interest accrued. The fintech firm will now enter into talks with the holders of its bonds to convert them into shares of the company (MC Payment).
MC payment, that was founded in 2005, had last raised funding about a year ago when it bagged S$5 million ($3.5 million) led by 2W Group, an investment firm from Thailand. Australia’s Aura Funds Management, tryb Capital and Perle Ventures had also participated in that funding round. Prior to that, it had raised S$6 million ($4.5 million) in a Series B round led by ESW Manage, an Asia-focused private equity (PE) firm, along with private investment firm, DZW Capital. Other investors in that round had included Singapore’s Golden Equator Capital.
In addition to the base price, Artivision Technologies said that it will offer an ‘additional consideration equivalent to the amount raised by MC Payment pursuant to its own fund-raising activities which shall be undertaken on a pre-money valuation of at least S$64.0 million from the date of the HOA until completion of the deal’. This will require investors in MC Payment to sell their shares or convertible securities in MC Payment to Artivision Technologies.
Artivision justified the deal, saying its plans to acquire the fintech firm comes on the back of Singapore’s push towards cashless payments.
MC Payment was among the firms that had recently submitted proposals to the Singapore government after the latter had sought the industry’s suggestions to adopt cashless payment systems in the city-state.
“The market for payment solutions in Singapore remains largely fragmented and offers opportunities for consolidation as the country moves to simplify and integrate the industry. The company’s acquisition of one of Singapore’s earliest fintech firms is timely as it allows its shareholders to participate in a business with a proven business model which has the potential for significant growth,” Artivision said.
If the deal is completed, it will result in MC Payment undertaking a reverse takeover of Artivision, making the fintech firm the first company in this space to the listed on the Singapore Exchange.
According to MC Payment founder and CEO Anthony Koh, the proposed listing in Singapore, through Activision, would mark a significant milestone in the company’s growth.
“By reacting quickly to adapt to the market’s needs, we have positioned ourselves favorably as an enabler of holistic payment solutions to businesses in the region. Our unique position underscores the success of our business model and the proposed listing in Singapore is an excellent platform which will further raise our profile, enable us to better serve our customers and provide us access to the broader investor community, bringing us to our next phase of growth,” he added.
On the Proposed RTO, Kenneth Goh, Executive Director and CEO of Activision, said: “The expansion into the fintech business aims to breathe new life into the Company as we reposition ourselves for long-term growth. We are confident that this is an exciting industry which offers a multitude of growth opportunities that will provide long-term shareholders value.”