- Frontier Digital Ventures (FDV) announces a $40 million capital raising to increase its stake in Encuentra24 (E24) to 100 per cent
- The company entered sale agreements with OLX Group and the founders of E24 to purchase their respective interests in the classifieds marketplace
- E24 is a classified marketplace with a presence in five Latin America markets and FDV says full ownership allows it to consolidate its position in this region
- The capital raising includes a $35 million placement which will partially fund the acquisition price and a $5 million share purchase plan
- On the market today, FDV is down 4.11 per cent and trading at $1.52 per share
Frontier Digital Ventures (FDV) has announced a capital raising to acquire the remaining interest in Encuentra24 (E24) from OLX Group and E24 founders.
The online marketplace company has entered agreements to move from a 26.3 per cent stake to full ownership.
E24 is a leading general classifieds marketplace with a presence in five Latin American (LATAM) markets including: Panama, Costa Rica, Guatemala, Nicaragua, and El Salvador.
The marketplace has a strong presence across key property and auto verticals, with limited competition. FDV said the move to full ownership would consolidate its position in the Latin American region and allow for opportunities to optimise operating efficiencies for potential cost savings.
To pay for the purchase, Frontier will raise $35 million through a placement, offering shares at $1.50 each, a 5.1 per cent discount too the closing price on Tuesday.
Additionally, the company is planning to undertake a $5 million share purchase plan (SPP) to retail shareholders, at the same price as the placement.
From the placement, $13.1 million will be used to purchase OLX Group’s 37.5 per cent interest in E24, whilst the other $21.9 million will be used for balance sheet flexibility to fund its mergers and acquisition pipeline.
Proceeds from the SPP will also be used for additional balance sheet flexibility.
The consideration for E24 founders’ 36.2 per cent stake will include a performance-based earn-out based on revenue, earnings and cashflow targets for FY22.
FDV Founder and CEO Shaun Di Gregorio was excited to increase FDV’s interest in E24.
“This transaction is expected to unlock the value of FDV LATAM with 100 per cent ownership and control, enabling the sharing of our transaction model IP and technology across the region,” he said.
“FDV LATAM represents a significant standalone business under FDV Group’s proposed new regional structure, with an attractive long-term growth profile and optionality in relation to future value realisation opportunities.”
On the market today, FDV was down 4.11 per cent and is trading at $1.52 per share at 2:51 pm AEDT.