The new announcement did not specify the amount that Xurpas will pay in cash to acquire the US VC firm but an earlier report by DealStreetAsia noted that the transaction is valued at 170 million pesos ($3.3 million).
The transaction follows a reverse-takeover scheme as the general partners of Wavemaker US – Frederick Manlunas, Benjamin Paul Santos, and James Jordan – have been approved to acquire some 1.7 billion in new common shares of Xurpas, or approximately 48 per cent stake in the listed tech firm.
The deal is expected to be completed by the fourth quarter of 2020, pending satisfaction of certain conditions and securing shareholders’ approval.
“This acquisition significantly expands Xurpas’ technology base and gives Filipino shareholders and investors access to an entire portfolio of promising venture-backed early-stage companies in the United States,” Nico Jose S. Nolledo, the company’s chairman, said in the disclosure.
Wavemaker US will appoint Eric Manlunas and Buck Jordan to the Xurpas Board after closing. The transaction does not include Wavemaker’s Southeast Asia practice, which will remain independent and wholly owned by its management.
Wavemaker US has been operating for almost 17 years as a top-rated US technology fund and has a track record of successful exits via both public offering of shares and acquisitions. It has over $210 million in assets under management.
The transaction comes even as Xurpas has been financially bleeding heavily since 2018. According to the financial reports it submitted to the Philippine Stock Exchange, the company incurred 2.64 billion pesos ($54 million) in losses for the entire 2019 and 48.6 million ($1 million) in the first quarter of this year so far.
This means Xurpas’ total losses since 2018 had already surpassed 3.5 billion ($72 million), or nearly five times the combined profits that the company booked from 2014 to 2017, which was at 787 million pesos ($16.2 million).