Asia-Pacific Strategic Investments to acquire MoneySmart at raised price tag of S$221.5m

HOTEL operator Asia-Pacific Strategic Investments (APS) on Friday (Nov 4) proposed to acquire Catapult Ventures, which owns personal financial marketplace MoneySmart, for a raised price tag of S$221.5 million.

APS said the new consideration was arrived at after an arm’s length negotiation and after agreeing to take into account an independent valuation of Catapult Ventures, which is to be completed before the acquisition.

The new valuation is roughly 75 per cent above MoneySmart’s estimated value after its last funding round in 2019, at US$89.9 million according to data platform VentureCap Insights.

The Business Times reported earlier in March that the group had entered into a non-binding heads of agreement to acquire MoneySmart at the price of US$161.7 million or S$219.3 million at the time.

The acquisition will result in a reverse takeover (RTO) of APS, allowing Catapult Ventures to become listed on the Singapore Exchange (SGX). This is, however, subject to approval from the exchange.

Vinod Nair, chief executive officer of MoneySmart, said listing through an RTO is faster and easier because a sponsor would be able to issue shares directly and garner support from shareholders with greater ease than through underwriting the deal in a traditional initial public offering.

Further, the valuation on the company being acquired can also be agreed upon at an early stage of the transaction.

“While the upcoming macro outlook suggests challenging times ahead, we believe we’re well-positioned to continue strong growth in the coming years,” said Nair.

“In fact, we believe this is exactly the right time for the RTO because the funds will be used to bring meaningful disruption in the financial services space.”

The deal will be financed by issuing 356,517,051 new shares at an issue price of S$0.62137 per consideration share, with the new shares making up 80 per cent of the enlarged share capital of the company.

APS’ board said this acquisition will present shareholders with an opportunity to realise a higher valuation for the company. The deal implies a valuation of S$55.4 million for APS, which is significantly more than its market capitalisation of S$17.8 million.

Given APS’ business disruptions in China, the company had been on the lookout for new investment opportunities and strategic acquisitions to improve the quality of its business operations and enhance its financial performance. 

This acquisition would thus allow APS to enter into the financial services industry in Singapore and help the company transform its business.

On the other hand, the RTO would also provide “significant growth capital” for MoneySmart, which will help the group accelerate its growth ambitions, said Nair.

The financial platform intends to use the funds to grow its membership and rewards programme, as well as expand its newly launched insurance business, Bubblegum.

With the additional capital, Nair also floated the possibility of other partnerships through potential mergers & acquisitions to “deliver greater value for its customer base”.

In order for the deal to close, APS has to garner the approval from its shareholders on the new changes for the company, which include a name change, appointment of new directors, the issuance of new shares as payment for the financial advisory services rendered by PrimePartners Corporate Finance and the issuance of anti-dilutive warrants, among other conditions.

Shareholders will also have to agree on a proposed whitewash resolution, which stipulates that a list of the relevant allottees hold 75.8 per cent of the consolidated shares after the proposed acquisition. *(see amendment note)

The share price of APS doubled on Friday as it ended at S$0.002.

*Amendment note: An earlier version of this article incorrectly calculated the premium being paid for MoneySmart over its last valuation. It also incorrectly stated that Oei Hong Leong, Sansa Advisors and Toh Soon Huat were part of the relevant allottees. They are in fact, not part of the relevant allottees.