Kuala Lumpur, Malaysia-based Super App has agreed to acquire a 60% stake in OneShop Retail from MobilityOne (LSE:MBO.UK) immediately prior to the deal’s close, resulting a combined ecommerce and card payment company.
The combined company is expected to be renamed TETE Technologies and is expected to trade on the Nasdaq under the symbol “TETE” once the deal is completed in the first half of 2023.
Tech & Telecom has a $115 million trust and has not yet supplemented this with a PIPE, and the parties have not released their merger documents. The SPAC’s profile page will be updated once additional information is available.
Super Apps shareholders are to receive Tech & Telecom shares equal to an aggregate value of $1.1 billion minus its closing net indebtedness $235 million. The remaining $865 million-worth of shares will be subject to earn-out conditions.
Quick Takes: This is a deal with a lot of moving parts, and still lacks a large amount of information at this stage.
In addition to the move by Super Apps to take over a chunk of OneShop Retail, the company has also agreed to a collaboration with payments app Myisco, which will takes effect at close. The Myisco app is an e-wallet similar to Venmo or the Cash App and is itself owned by ANGKASA, which is a national federation of cooperatives in Malaysia.
ANGKASA is a broad-based network comprised of 14,657 cooperatives in Malaysia with an individual membership of about 7 million people. It reportedly had about RM152.1 billion ($32.2 billion) in assets as of June 2021 and RM41.5 billion ($8.8 billion) in annual revenues in 2020.
As a part of the Myisco collaboration, ANGKASA moving forward will use OneShop Retail’s systems to process all bill payments and credit lending as well as customer debit, credit and check payments throughout its broad network. OneShop Retail technology will also be used to process ANGKASA’s payroll.
Based on this and other potential collaborations, Super Apps believes it will generate $348 million in revenue in 2023E. MobilityOne will retain OneShop Retail’s intellectual property but will give OneShop Retail a long-term license for the IP backing these systems.
MobilityOne itself reported £255.7 million ($287.6 million) in overall revenues 2021 across its 10 subsidiaries, of which OneShop Retail is just one. To this point, the OneShop Retail branch appears to have primarily focused on merchant retail sales systems in Malaysia.
The company’s earnings do not break down its revenue by geography, but it noted it generated about £2 million in profit subject to Malaysian corporate taxes, which was presumably made up by OneShop Retail and the group’s six other subsidiaries focused on the country.
As such, for a deal that is already complicated on the face of it, there are still many more questions that investors will surely be interested to see answered in forthcoming materials. Being integrated into such a large network from the start is certainly an enticing opportunity, but it appears that several entities are in a position to take a cut of the action.
The market has also been wary of Southeast Asia-based fintechs with the five Singapore-based de-SPACs trading at an average price of $2.42. This cohort is led by perhaps the region’s largest fintech in Grab (NASDAQ:GRAB), which was at one point the largest SPAC deal in history.
Grab now trades at 5.8x its current revenue. The parties to this transaction meanwhile have not released a proposed enterprise value, but the price tag in terms of its aggregate share consideration to Super Apps equals about 3.2x its 2023E revenue.
- ARC Group Limited is acting as sole financial advisor to TETE.
- Loeb & Loeb LLP is acting as legal counsel to TETE.
- Jenny Chen-Drake is acting as legal counsel for the Company.
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