- Frontier Digital Ventures (FDV) will acquire leading classifieds companies, Fincaraíz, Avito and Tayara from Adevinta for roughly $56 million
- The acquisitions represent a compelling opportunity for FDV to extend the presence of its operating companies as well as positively contribute to revenue
- To fund the acquisition, FDV will raise up to $100 million through an institutional placement and a one-for-nine two trance entitlement offer
- The leftover $44 million will go towards growth capital, a stronger balance sheet and transaction costs
- Company shares closed in the grey trading flat at $1.57
Frontier Digital Ventures (FDV) has entered agreements to acquire Fincaraíz, Avito and Tayara from Adevinta for roughly $56 million.
Fincaraíz is the leading real estate classifieds portal in Colombia with a strong and established management team. Avito is the number one classifieds business in Morocco with leading positions across general, auto and real estate.
FDV considers the acquisition to be an opportunity for its operating company, Moteur, to collaborate with Avito.
Tayara is also a leading general classifieds platform and a household name in Tunisia. Acquiring Tayara supports the company’s entry into an appealing market with high rates of gross domestic product growth (GDP).
Overall Frontier Digital Ventures believe the acquisitions represent a compelling opportunity to extend the market leadership of its operating companies and make a significant contribution to revenue.
“They are highly complementary to FDV’s existing portfolio and strengthen our market leadership in existing and new adjacent geographies,” Founder and CEO Shaun Di Gregorio said.
The Capital raise
The acquisition will cost Frontier around $56 million which it will fund through a capital raise of up to $100 million.
FDV will aim to raise $63.4 million through a non-underwritten institutional placement and $36.6 million through a non-underwritten one-for-nine pro rata accelerated non-renounceable entitlement offer.
The Placement
Up to 50,725,000 new shares will be issued to institutions, sophisticated and professional investors at $1.25 per share to raise $63.4 million.
The issue price represents a 20.1 per cent discount to the last closing price of $1.565 per share and a 2.7 per cent discount to the 15-day volume-weighted average price.
The placement is expected to be settled on Thursday, October 15 and the new shares will begin trading on the following day.
The Entitlement offer
The entitlement offer will be offered to existing shareholders at the same price as the placement to raise up to $36.6 million.
The offer will be conducted in two parts, an institutional component and a retail component.
The remaining $44 million from the capital raise will go towards further growth capital, balance sheet flexibility and paying transaction costs.
Company shares closed in the grey to trade flat at $1.57 each.