The investee company – RightBridge Ventures – of Fatfish Group’s Swedish-listed subsidiary (called Abelco) has just entered into a reverse takeover (RTO) deal worth well over $25 million with the publicly-listed Swedish firm Agilit Holding AB.

It’s a lot to take in, so let’s break it down.

The reverse takeover (RTO) agreement sees RightBridge being acquired at a valuation of $25.5 million and that’s good news for FFG which currently owns about 40% of RightBridge’s owner Abelco Investment Group AB.

 

Woah. What’s an RTO?

In a nutshell, your garden variety RTO is when a public company gets acquired by the shareholders in a (usually) littler private company.

An RTO is often considered as an alternative to an initial public offering (IPO), and where the target public company is listed, an RTO can also be known as a ‘backdoor listing’.

An RTO can be executed by the private company’s shareholders selling their shares in the private company to the public company in exchange for the issue of shares in the public company.

Alternatively the private company can sell its business to the public company in exchange for the issue of shares in the public company to the private company.

Fatfish Group (ASX:FFG) has itself been very busy on the M&A trail, most recently acquiring JazzyPay, a Philippines-based payments provider, for US$1.57m ($2.1m), part of a larger strategy across the rich Asia fintech market.

FFG and Abelco operate out of innovation hubs in Kuala Lumpur, Singapore and Stockholm.

 

The nitty gritty

Under the RTO deal announced today,  Agilit Holding AB, which is the public company  listed on the Nasdaq  First  North  Growth  Market, will acquire 100% of RightBridge from FFG and other shareholders for approximately  SEK180 million (A$25.5 million).

If the deal gets the nod of various approvals it’ll be settled via the issuance of 2,999,487,967 new shares in Agilit at an issue price of SEK0.06 each.

Rightbridge shareholders, including FFG, will then hold some 93.5% of the total share capital of Agilit.

FFG’s subsidiary, Abelco, will effectively own 38% of Agilit. And that’ll be worth SEK73.1 million (A$10.4 million).

Through its holding in Abelco, FFG will have an effective indirect stake in Agilit to the tune of approximately SEK29.2 million (A$4.1 million).

 

The fine print

FatFish says the completion of the RTO is conditional upon:

  • the approval of the existing shareholders of Agilit to undertake the reverse takeover via an extraordinary general meeting;
  • the approval of NASDAQ First North for the reverse takeover;
  • Abelco obtaining an exemption from the Swedish Securities Market Board to extend a mandatory general offer to acquire all the outstanding shares of Agilit; and
  • the transfer of Agilit’s current operations to a wholly owned subsidiary, which will then be distributed to Agilit’s existing shareholders.

There’s another rider – as part of  the RTO, Abelco has entered into a voluntary moratorium  to not sell any of its shares in Agilit for 12 months.

Fatfish Group has businesses all over Southeast  Asia and beyond,  with  interests  in  building ventures across fintech, gaming and other tech-related entities.

 

This article was developed in collaboration with FatFish Group, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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