KUALA LUMPUR (Aug 26): Catcha Digital Bhd (KL:CATCHA) is back in talks to renegotiate its RM22.95 million acquisition of a 51% stake in digital marketing consultancy DS Services Sdn Bhd, after finalising the deal in March following more than two years of negotiations.
In a filing with the bourse on Tuesday, Catcha Digital said it is renegotiating the terms of the deal but didn’t specify which ones. The decision is because of changes in the economy, market, and industry affecting DS Services.
As a result, the DS Services acquisition won’t be voted on at a Sept 18 shareholder meeting. Only the acquisitions of Framemotion Studio (60% for RM37.32 million) and Theta Service Partner (92.5% for RM35 million), along with a one-for-four rights issue to fund them, will be voted on, a Bursa Malaysia filing said.
Catcha Digital said it will update shareholders once the revised terms are finalised with DS Services’ vendors.
"The board will make the necessary announcements on the status of the proposed acquisition of DS Services in due course, amongst others, upon the finalisation of revised terms for the proposed acquisition of DS Services with the DS Services vendors [Kuhan Kumar A/L Palaniappan and Sarojah A/P Thandan], where applicable," Catcha Digital said in the Bursa Malaysia filing.
It also clarified that the DS Services deal is not inter-conditional with other corporate proposals undertaken by the group.
Digital Services is present in Malaysia and Singapore, focusing on performance marketing using automation, data analysis, and custom software. Its clients include property, automotive, and education businesses.
Catcha Digital announced in March that it had finalised a RM22.95 million deal to acquire DS Services, after signing a letter of intent in 2023. The deal was to be paid in three installments over 24 months, depending on DS Services and its subsidiaries hitting a net profit of RM4.5 million in each of the two years after completion.
Catcha’s unit iMedia Asia and vendors Kuhan and Sarojah signed a share sale and shareholders' agreement to outline their rights and responsibilities. They have until Nov 14, 2025, to meet the deal conditions.
DS Services is one of several companies Catcha Digital has bought in the last nine months.
The group announced seven acquisitions worth over RM130 million, including:
- Framemotion Studio (60% for RM37.32 million)
- Theta Service Partner (92.5% for RM35 million)
- Drive 2 Digital (60% for RM16.2 million)
- One International Exhibition (60% for RM11.38 million)
Catcha Digital plans a one-for-four rights issue to raise up to RM25.23 million to help fund some acquisitions. The shares will be priced at up to a 20% discount, with final pricing expected in 1-2 months. The funds will cover expenses for the next 12 to 18 months, with future income partly coming from the new businesses. They also plan a private placement to raise RM10.09 million as a backup if the rights issue doesn’t go as planned.
Shares in Catcha Digital settled half a sen or 1.75% higher at 29 sen on Tuesday, valuing the group at RM102.60 million. Year-to-date the share price is down 21.62%.