DeClout to buy 75% stake in Play-E for for $19m
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DeClout to buy 75% stake in Play-E for $19m
Singapore-listed technology service provider DeClout Limited, along with its subsidiary Corous360 Pte Ltd, have reached a deal to buy Play-E Pte. Ltd for up to for up to S$18.9 million.
In a regulatory filing Tuesday, DeClout said its 94.8 per cent subsidiary, Corous360 Pte Ltd had entered into a sale and purchase agreement with Jupiter-Soft Pte. Ltd. and Sng Kim Guan for the deal. The transaction involves Corous360 acquiring 150,750 ordinary shares in the capital of Play-E, equivalent to 75 per cent equity in the company.
“Through Play-E’s retail alliance partnership, C360 will benefit from (Play-E’s) multiple potential revenue streams including sale of products through mobile applications and physical stores of the Play-E’s retail partners; platform fees from (Play-E’s) retail partners; advertising fees from content providers; and membership fees from consumers,” the company’s regulatory filing added, justifying the rationale behind the deal.
C360 group of companies has master distributorship rights to leading products in the region.
“By combining such master distributorship rights with the retail alliance partnership of Play-E, C360 has the opportunity to control both the upstream and downstream of the vertical market by leveraging on its master distributorship status to secure leading products through a platform comprising a mobile application and a network of retail outlet partners in Singapore, Hong Kong, and Taiwan which will attract premium users to join the Platform. The increase in the number of premium users in the Platform will in turn put C360 in a better position to secure distributorship rights to even more leading products for its businesses,” the regulatory filing added.
Neo Group buys 90% in CT Vegetables & Fruits for S$5.4m
Singapore-based food catering firm, Neo Group Limited, has bought 90 per cent-stake in CT Vegetables & Fruits Pte Ltd for S$5.4 million, as part of its vertical integration strategy to provide turnkey food and catering solutions, the company announced Tuesday.
CT Vegetables trades more than 300 varieties of fruits and vegetables to its customer base consisting of local hospitals, foreign cruise ships and ship chandlers. The deal will include two entities set up primarily for the purpose of importing fruits and vegetables.
Neo Group will pay S$4.8 million in cash, funded by bank borrowings, while the remaining S$0.6 million will be through the issuance of new ordinary shares at a 10 per cent discount to the volume-weighted average price of the Group’s shares on the completion date.
“The remaining 10 per cent-stake in CT Vegetables will be retained by its original owner who will be the acting chief executive and chairman of CT Group.”
The remaining 10 per cent-stake in CT Vegetables will be retained by its original owner who will be the acting chief executive and chairman of CT Group.
The deal comes close to the heels of Neo Group’s first major acquisition, where it had bought bought Thong Siek Group, and also a 55 per cent stake in the parent company and manufacturer of “DoDo” brand of fishballs for S$7.35 million in June 2015.
That deal had allowed had allowed Neo Group to venture into food manufacturing that directly supplies surimi products to its food catering and food retail businesses.
Founder, chairman and chief executive of Neo Group, Neo Kah Kiat said: “We are pleased to have further strengthened our integrated value chain further with the addition of CT Group, a strong market leader in its industry. Apart from the acquisition being immediately earnings accretive, we recognise synergies that can be reaped from this acquisition to grow our food and catering Supplies business that will allow us to lower food supply costs whilst ensuring quality and timeliness of delivery.”
“At the same time, this strategic upstream move will reduce our reliance on third party suppliers, enhancing our self-sufficiency in our catering and manufacturing businesses and enable us to pursue business opportunities from external parties, thereby creating new income streams,” he added.
Under its food catering business, the Neo operates four brands – Neo Garden, Orange Clove, Deli Hub and Best Catering.
Questions & Answers
Q.What is the primary motivation for DeClout acquiring a stake in Play-E?
What is the primary motivation for DeClout acquiring a stake in Play-E?
DeClout aims to benefit from Play-E's multiple revenue streams, including product sales via mobile apps and physical stores, platform fees, advertising fees, and membership fees from consumers. This combines with C360's distributorship rights.
Q.How will DeClout's subsidiary Corous360 use Play-E's retail alliance partnership?
How will DeClout's subsidiary Corous360 use Play-E's retail alliance partnership?
Corous360 plans to use Play-E's partnership to control both upstream and downstream parts of the vertical market. This involves using its master distributorship to secure products through a platform of mobile apps and retail partners in Singapore, Hong Kong, and Taiwan.
Q.What strategic benefits does Neo Group expect from buying CT Vegetables & Fruits?
What strategic benefits does Neo Group expect from buying CT Vegetables & Fruits?
Neo Group anticipates strengthening its integrated value chain, lowering food supply costs, and ensuring quality and timely delivery. It also aims to reduce reliance on third-party suppliers and create new income streams from external parties.
Q.How is the acquisition of CT Vegetables & Fruits being financed by Neo Group?
How is the acquisition of CT Vegetables & Fruits being financed by Neo Group?
Neo Group will pay S$4.8 million in cash, funded by bank borrowings. The remaining S$0.6 million will be paid through the issuance of new ordinary shares, offered at a 10 per cent discount to the volume-weighted average price.
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