KUALA LUMPUR (March 14): Catcha Digital Bhd (KL:CATCHA) made its fourth acquisition in nearly four months by purchasing a 60% stake in digital media advertising firm Framemotion Studio Sdn Bhd (FMS) for RM37.32 million in cash.

The deal is payable over three tranches: the first upon completion of the share agreement, and the second and third contingent upon achieving profit targets of RM6.8 million in the first 12 months and the subsequent 12 months.

To incentivise the remaining shareholders to grow the business and align their interests with Catcha Digital, the purchase consideration is subject to downward adjustments based on profit achievements, which will dictate the price-earnings multiple, and net debt levels in the first 12 months and the subsequent 12 months.

After the acquisition, FMS shareholder Pua Yin Chye will reduce his stake from 70% to 28%, while Tan Eng Hong will decrease his holding from 30% to 12%. Catcha's wholly-owned subsidiary, iMedia Asia Sdn Bhd, will acquire the remaining 60% stake in FMS.

FMS is principally involved in the provision of immersive digital marketing services, specialising in the production of digital content leveraging on virtual reality and augmented reality technology.

Its services include the production and integration of animation and digital content to create immersive digital marketing effects across digital out-of-home billboards, digital platforms like social media and websites, as well as event spaces.

For the financial year ended Dec 31, 2023 (FY2023), FMS posted a net profit of RM7 million on revenue of RM37.41 million. Its net assets were worth RM32.14 million.

Catcha Digital said the acquisition of FMS will expand its digital advertising solutions by introducing new experiential and immersive digital marketing formats.

As such, this acquisition complements its existing online advertising offerings and meets the growing demand for integrated online-to-offline strategies, and aligns with the group's long-term objective of expanding its client base within the digital media and advertising sector.

In December last year, Catcha Digital announced three acquisitions with a total purchase price of RM35.18 million.

These include RM7.6 million for a 70% stake in food expo provider Tastefully Malaysia Sdn Bhd, RM16.2 million for a 60% stake in automotive digital media company Drive 2 Digital Sdn Bhd (D2D), and RM11.38 million for a 51% stake in artificial intelligence (AI) powered sales automation software provider Nexible Solutions Sdn Bhd.

As at end-2024, Catcha Digital’s cash and cash equivalents stood at RM5.03 million, with no material borrowings.

For the 12 months ended FY2024, the group’s net profit more than doubled to RM5.27 million from RM2.06 million, while total revenue increased 62.9% to RM39.39 million from RM23.57 million.

It exited Guidance Note 2 (GN2) status — a designation for cash companies that lack a substantial operating business — in July 2023, after it acquired iMedia Asia for RM43.92 million in cash and shares.

The company was classified as GN2 in August 2017, following the sale of its then digital asset Rev Asia Holdings Sdn Bhd to Media Prima Bhd (KL:MEDIA) for RM105 million.

At the time of writing, Catcha Digital’s shares were unchanged at 32 sen, valuing the group at RM115.26 million.

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