KUALA LUMPUR (March 24): Catcha Digital Bhd (KL:CATCHA) has proposed to acquire a 92.5% stake in financial software company Theta Service Partner Sdn Bhd for RM34.96 million, as part of the company’s expansion into enterprise IT solutions and to diversify its revenue beyond digital media advertising.

In a filing on Monday, the digital media and advertising company said its wholly owned subsidiary Catcha Theta Holdings Sdn Bhd has signed a conditional share sale agreement with Theta Service vendors — namely Mark Leong Tse Ho, Genesis Liegenschafts Verwaltung GmbH, Yap Siew Lan, Hew How Fong, Choy Chong Hwai and Chan Chong Yoong — to acquire the controlling stake in the company.

The purchase will be entirely in cash, with payment structured in four tranches, of which the last three tranches are tied to Theta Service’s expected profit after tax for the financial years ending 2024, 2025, and 2026.

The group plans to fund the acquisition through a combination of internal funds, bank borrowings and fundraising exercises. As at Feb 28, Catcha Digital’s cash and bank balances stood at RM5.03 million.

Post-acquisition, Theta Service will become a 92.5%-owned subsidiary of Catcha Theta and an indirect subsidiary of Catcha Digital.

“This strategic acquisition marks Catcha Digital's expansion into the banking software solutions sector, specifically in loan origination software,” Catcha Digital said in a statement.

“This transaction is expected to contribute positively to Catcha Digital's earnings,” it said.

Theta Service specialises in enterprise IT solutions, focusing on credit workflow software for financial institutions. It operates in Malaysia, the UK, and Singapore, with a strong client base spanning international market.

"What particularly impressed us about Theta Group was their deep domain expertise in loan origination systems, evidenced by their longstanding relationships with major financial institutions across multiple markets,” Catcha Digital chairman Patrick Grove said.

Shares of Catcha Digital settled down one sen or 3.23% to 30 sen on Monday, giving the group a market capitalisation of RM104.27 million.