Catcha Digital Berhad (“Catcha Digital”) today announced its wholly-owned subsidiary, Catcha Theta Holdings Sdn Bhd (“Catcha Theta”) has entered into a conditional share sale agreement to acquire 92.5% equity interest in Theta Service Partner Sdn Bhd (“Theta”).
From left (sitting): Hew How Fong (Director & Chief Technology Officer, Theta), Mark Leong (Chief Commercial Officer, Theta), Eric Tan (CEO, Catcha Digital Berhad), Oscar Ong (Vice President of Investments, Catcha Digital Berhad)
The acquisition is for a cash consideration of approximately RM35.0 million (subject to adjustments as outlined in the conditional share sale agreement), which will be paid in four tranches of RM5.9 million, RM6.6 million, RM11.2 million, and RM11.3 million, respectively.
The second, third and fourth tranche payments are tied to expected profit after tax of not less than RM3.5m, RM4.0m and RM5.0m for the financial year ended/ending 31 December (“FYE”) 2024, FYE 2025 and FYE 2026, respectively.
This strategic acquisition marks Catcha Digital’s expansion into the banking software solutions sector, specifically in loan origination software. In FYE 2023, Theta and its subsidiaries (“Theta Group”) recorded a profit after tax (“PAT”) of RM3.4 million.
This transaction is expected to contribute positively to Catcha Digital’s earnings.
About Theta Group
Theta is a leading provider of loan origination software for financial institutions through its flagship product ORIGINS – a comprehensive lending solution that streamlines operations across retail, SME, and commercial segments.
The software offers sophisticated features including automated credit assessment, multi-product support, workflow automation, and regulatory compliance capabilities, enabling financial institutions to efficiently process and manage their lending operations while maintaining compliance with complex regulatory requirements.
Theta Group has gained significant traction among major financial institutions globally, maintaining long-term relationships spanning over two decades with some of Southeast Asia’s largest banking groups for their operations across the region, including one of the largest banks in Singapore, one of the largest banks in Malaysia, and a prominent Pan-Asian bank headquartered in Taiwan.
Catcha Digital enters banking software sector
Over the past two decades, Theta Group has established itself as a trusted partner in the banking technology sector, helping bank clients reduce end to end lending process times significantly while processing millions of loan applications across multiple countries including Singapore, Malaysia, the Philippines, Indonesia, Taiwan, India, Hong Kong, Canada, USA and the UK.
With the increasing focus on digital transformation in the banking sector, increased compliance requirements in the banking sectors imposed by regulators, and the growing demand for efficient loan processing systems, Theta Group is well-positioned to capture the expanding market opportunity in the region.
“This acquisition represents a strategic entry into the banking software sector and is well-aligned with our vision of building a comprehensive digital technology group.
“What particularly impressed us about Theta Group was their deep domain expertise in loan origination systems, evidenced by their long-standing relationships with major financial institutions across multiple markets.
Their proven track record in delivering mission-critical software solutions to its long term customers, combined with a proven management team with deep domain expertise, presents compelling sustainable growth opportunities,” said Patrick Grove, Chairman of Catcha Digital.
“Joining forces with Catcha Digital strengthens our ability to capture the significant opportunities we see in the banking software sector.
“Over our 25-year journey, we’ve witnessed firsthand how critical robust loan origination systems have become for financial institutions’ operations, alongside the tailwind presented by tighter regulation amongst the banking industry globally.
The market is now demanding more sophisticated solutions, particularly around artificial intelligence and cloud capabilities.
Catcha Digital’s strategic support and regional network will be instrumental as we accelerate our next phase of growth,” said Leong Kwok Hung, Managing Director of Theta.
The proposed acquisition aligns with Catcha Digital’s vision to diversify its business to include information technology solutions business and build the leading digital group in ASEAN, targeting the region’s fast-growing digital economy, valued at approximately RM1 trillion according to Google, Temasek, and Bain & Company’s 2024 SEA e-Conomy report.
The Group continues to seek strategic investments and proposed acquisitions that complement its existing segments while expanding its presence in the digital economy beyond digital media.
Including the proposed acquisition of Theta, Catcha Digital has announced six strategic acquisitions in the last five months, each positioned to strengthen its foothold in the digital economy and contribute positively to future earnings.
The aggregate expected profit to be achieved by each target company is approximately RM21.1 million, based on their respective 12-month post-completion periods or FYE 31 December 2025 where applicable.
