Digilife Tech to acquire 71% stake in Stradbroke Investments for S$7.6m

DIGILIFE Technologies BAI has entered into a sale and purchase agreement to acquire a 71 per cent stake in Stradbroke Investments, a Singapore company engaged in multiple industries, for S$7.6 million.

This translates to about 11.1 million shares, which Digilife Tech said it would fund by issuing 5.5 million shares to the seller, Hong Kong investment holding company TG Holdings HK, at S$1.39 per share.

The issue price per consideration share was determined with reference to the volume-weighted average price per ordinary share of the company trading on the Singapore Exchange (SGX) on Dec 27, a day before the agreement was entered into, said Digilife Tech in a bourse filing on Wednesday (Dec 29).

The consideration amount was arrived at after arms' length negotiations and on a willing-buyer, willing-seller basis, and the company had taken into account several factors including the valuation of the sale shares, the value of the assets of Stradbroke Investments, as well as its business prospects.

Digilife Tech and the board have also taken into consideration a preliminary draft valuation report done by an independent valuer to determine the value of the sale shares. The final valuation report will be sent out in a circular to shareholders.

Assuming the transaction was completed on Nov 30, 2021, the net tangible asset per share after the acquisition would be 3.48 Singapore cents, from 2.48 cents, according to pro forma estimates.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

And assuming the transaction was completed on Apr 1, 2021, the company's loss per share after the acquisition would be 0.20 Singapore cent, from 0.23 cent, according to pro forma estimates.

Stradbroke Investments is a Singapore company engaged in multiple industries, including gold trading, fisheries, timber trading and property.

It also owns 51 per cent of a digital application product company, HYLF Pte Ltd, and a 5-storey multi-purpose detached building in Singapore at 152 Ubi Ave 4.

Digilife Tech said the proposed acquisition will allow the company to "re-strategise its financial and capital resources".

It will allow the company to enter the digital application and innovative startup space, give it ownership of a real estate of value, and access to other businesses in Papua New Guinea.

The board will decide after the acquisition how the businesses can be run and managed in the long run and if they are appropriately aligned to the long-term strategy of the company, said Digilife Tech.

Being a no-cash deal, the agreement will not involve any cash outflow for the company, and so existing cash could be re-deployed to other projects if needed, it added.

The proposed acquisition is considered a major transaction under Chapter 10 of SGX listing rules, and is subject to shareholders' approval. An extraordinary general meeting will be convened on the matter in due course, said Digilife Tech.

Shares of Digilife Tech closed flat at S$1.39 on Dec 29.