mDR unveils move to acquire Japan firm in RTO deal

Singapore

SINGAPORE-LISTED mDR Ltd is poised to acquire a Japan-based company engaged primarily in the business of developing and providing mobile content.

It's is a "very substantial acquisition" or "reverse takeover" (RTO), mDR said on Monday. The expected consideration is between S$110 million and S$165 million, to be made in cash, shares and convertible debt.

mDR, which distributes and sells mobile devices and services and also has made forays into Myanmar, said it has entered into a memorandum of understanding (MOU) with four shareholders of the target company, three of whom are corporate entities and one an individual. The vendors will own (a) between 35 and 40 per cent of mDR's post-completion enlarged issued capital; (b) and between 45 and 50 per cent of the enlarged capital upon conversion of the full amount of the convertible debt.

mDR said, without naming the target company, that it is profitable and is expected to become a key revenue and profit contributor of mDR's bottom line.

"The company believes that the target's product offerings and services are synergistic with the company's mobile devices business," mDR said in its announcement. "The company also believes that the target's product offerings, when integrated with the group's existing products and services, and offered through the group's diverse distribution platforms, may result in the group gaining a competitive edge over its competitors."

The vendors will seek a waiver of their obligation to make a mandatory general offer.

Shares in mDR closed on Monday unchanged at 0.6 Singapore cent.