Parent company Exeo Global Asset Holdings has proposed to acquire all of IT solutions provider&rsquo s shares, except those it already holds and any treasury shares, for S$0.32 in cash apiece

 

[SINGAPORE] Procurri Corp : BVQ 0% has appointed Evolve Capital Advisory as the independent financial adviser (IFA) for the acquisition offer from parent company Exeo Global Asset Holdings amid a potential delisting from the Singapore Exchange (SGX).

 

The mainboard-listed IT solutions provider said in a regulatory filing on Monday (May 5) that the IFA will advise its independent directors, who will make a recommendation to shareholders on the proposed acquisition.

 

Procurri and Exeo Global Asset Holdings announced the proposed acquisition on Apr 28 for the latter to acquire all of Procurri&rsquo s shares, except those it already holds and any treasury shares, for S$0.32 in cash per share.

 

The offer price represents a 77.8 per cent premium to Procurri&rsquo s traded price on Apr 25, when the company requested a trading halt after the market closed.

 

It also reflects a premium of about 77.8 per cent, 74.4 per cent, 75.8 per cent, 75.3 per cent and 74.6 per cent over the volume-weighted average price per share for the one, three, six, nine and 12-month periods, respectively.

 

Procurri is a subsidiary of Exeo Global Asset Holdings, which holds a direct stake of approximately 86.59 per cent in Procurri&rsquo s issued share capital.

 

Exeo Global Asset Holdings is a wholly owned subsidiary of Exeo Global, a company based in Japan and listed on the Tokyo Stock Exchange.

 

Both Procurri and Exeo Global Asset Holdings highlighted that the proposed acquisition presents &ldquo a compelling opportunity for target shareholders to realise their investment at an attractive premium over historical market prices without incurring brokerage or trading costs&rdquo .

 

They also highlighted the low trading liquidity of Procurri&rsquo s shares, noting that the acquisition provides an &ldquo opportunity for target shareholders to exit their entire investment in the target shares, which may otherwise be difficult&rdquo in such a situation.

 

Since its initial public offering in 2016, Procurri has not conducted any fundraising on the SGX, except for a placement in January 2023 to restore its public float.

 

The company said it is &ldquo unlikely to require access to the Singapore capital markets in the foreseeable future to finance its operations&rdquo which makes its listed status on the SGX &ldquo no longer necessary&rdquo .

 

The acquisition, in line with global market trends, is expected to allow Procurri to leverage synergies with Exeo Global Asset Holdings and Exeo Global. The company said it will be able to &ldquo pursue longer-term business strategies which may otherwise contrast or conflict with the shorter-term expectations of the public market&rdquo .

 

Procurri also believes that competing offers for the company are unlikely, given that Exeo Global holds more than 50 per cent of its shares.

 

However, the acquisition is subject to shareholder approval, regulatory clearances, a court order, and the lodgement of the court order with the Accounting and Corporate Regulatory Authority.

 

Additionally, there must be no &ldquo material adverse effect&rdquo between the implementation agreement signed on Apr 28 and the lodgement date.

 

Previous cash offers

This is not the first time Procurri has received a cash offer.

 

In 2022, tech incubator DeClout made a mandatory cash offer for Procurri at S$0.425 per share, after acquiring 3.9 million shares via a married deal, triggering the threshold for a compliance offer.

 

By the close of the offer, DeClout had received valid acceptances for 138.8 million shares, representing 46.95 per cent of Procurri&rsquo s total share capital.

 

Earlier, in 2021, private equity firm Novo Tellus launched a partial offer to acquire 27.9 per cent of Procurri at S$0.365 per share, citing the need for significant strategic investment to grow long-term value.

 

However, the offer fell through after it raised its stake to only 37.37 per cent and failed to secure 50 per cent support from independent shareholders.

 

At the time, DeClout and two other substantial shareholders &ndash who collectively held 34 per cent &ndash said they would vote against the bid.

 

Procurri asked for the trading halt to be lifted on Apr 29. Its shares closed flat at S$0.30 on Monday.

 

Exeo Global Asset Holdings, a wholly-owned subsidiary of Exeo Global, is seeking to take Procurri Corporation private via a scheme of arrangement for 32 cents per share. In its April 28 announcement, Exeo Global Asset Holdings says it seeks to acquire to acquire all the shares it does not own in the Mainboard-listed company.

 

Exeo Global is a wholly-owned subsidiary of Japanese conglomerate Exeo Group, which is listed on the Tokyo Stock Exchange. Procurri is also a subsidiary of Exeo Global Asset Holding with Exeo Global Asset Holdings owning an 86.59% stake in the company.

 

The acquisition is conditional upon Procurri' s shareholders holding three-fourths (or 75%) the value of the shares voting at the scheme meeting, regulatory approvals, the court order as well as the lodgement of the court order with the Accounting and Corporate Regulatory Authority (ACRA).

 

The date of the scheme meeting will come with the release of the scheme document, while the grant of the scheme court order will be sought after the meeting. The court order is targeted to be lodged with ACRA on or around 10 business days after the order is granted.

 

There should also be " no material adverse effect" between the implementation agreement signed on April 28 and the date of the lodgement.

 

According to Procurri and Exeo Global Asset Holdings, the scheme is a " compelling opportunity" for shareholders to realise their investment at an " attractive premium" over Procurri' s historical market prices without incurring brokerage or trading costs.

 

The offer price represents a premium of 77.8% to Procurri' s last-traded price on April 25 and represents a premium of 77.8%, 74.4%, 75.8% and 75.3% over the volume-weighted average price (VWAP) per share for the one-, three-, six-, nine and 12-month periods respectively. Trading liquidity of shares in Procurri has also been low.

 

As at April 28, Fumitoshi Imaizumi, the chairman and non-executive and non-independent director of Procurri' s board, is also the director of Exeo Global Asset Holdings.