Channel NewsAsia
Updated: 09/04/2014 13:18 | By Channel NewsAsia

US firm buys Singapore instant messaging developer HotApps for S$876m

US firm buys Singapore instant messaging developer HotApps for S$876m


US firm buys Singapore instant messaging developer HotApps for S$876m

SINGAPORE: United States company Fragmented Industry Exchange (FIE) will be buying Singapore eDevelopment's (SeD) subsidiary, HotApps International, for US$700 million (S$876 million).

In a press release on Thursday (Sep 4), the Singapore Exchange (SGX) Catalist-listed SeD said FIE will acquire HotApps for 1 million new shares at US$10 each and US$690 million worth of zero-coupon perpetual bonds - for a total of US$700 million. Once the deal is completed, FIE will hold HotApps - an instant messaging software developer - as a wholly owned subsidiary, it said.

SeD, in turn, will own 99.84 per cent of FIE, assuming full conversion of the bonds and the exercise of a call option, it added.

"This transaction will bring with it two significant benefits. The first is that HotApps will be able to tap the US capital markets to fund its growth. The second is that we will be able to accelerate the launch of HotApp - the flagship application of HotApps - in the US and Latin American markets," said Mr Chan Heng Fai, CEO of SeD.

FIE has applied to be listed on an over-the-counter bulletin board, which is an electronic inter-dealer quotation system facilitated through the Financial Industry Regulatory Authority of the United States.

By parking HotApps under FIE, SeD hopes to capitalise on the bigger pool of investors in the US to fund the growth of the IM developer. It also looks to accelerate the development and deployment of its flagship app in 24 countries, including Singapore, before the end of 2014, according to the company.

SeD had acquired HotApps International, a Singapore-based virtual startup, for S$98,000 in August this year. The Catalist-listed company identified infocommunications technology (ICT) and property as its two main growth engines, according to its website. - CNA/kk

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