Tuesday, July 5, 2011

Star to Buy 4.99% of Catcha Media for RM4.97m

Catcha Media Berhad (“Catcha Media”) announced today that leading Malaysian media company Star Publications (M) Bhd (“The Star”) will be acquiring a stake in Catcha Media, in conjunction with the latter’s ongoing Initial Public Offering (“IPO”) exercise. Catcha Media is scheduled to be listed on Bursa Malaysia’s ACE Market on 22nd July 2011.

Catcha Media aims to raise RM17.25 million from its Public Issue of 23,000,000 new ordinary shares, each at an issue price of RM0.75 where 3,000,000 shares have been offered to the Malaysian public, while 20,000,000 shares are for private placement.

As part of Catcha Media’s private placement exercise, The Star has subscribed for 6,636,000 shares at RM 0.75 per share. This stake will represent 4.99 percent of the enlarged issue and paid up capital of Catcha Media upon listing, which represents the maximum equity shareholding in Catcha Media that The Star could possibly subscribe to, given the structure of the IPO.

The Star, currently listed on Bursa Malaysia’s Main Board, is Malaysia’s leading integrated media organisation, with group revenues totalling more than RM1 billion for 2010. It publishes Malaysia’s leading English language newspapers ‘The Star’ and ‘The Sunday Star’, which boast a million readers on average daily. The Star also has controlling interests in several radio stations and online portals.

Patrick Grove, Director and Founder of Catcha Media commented, “We are very excited to welcome the Star as a shareholder of Catcha Media, as we anticipate that this investment will be in line with the strategic interests of both parties. We are already in discussions with The Star’s team to explore potential opportunities for business growth synergy. We also appreciate The Star’s confidence in our business and future prospects.”

Ho Kay Tat, Group Managing Director and CEO of The Star said, “The Star views this
acquistion as a strategic move to add value to its current portfolio of high-growth media assets. Catcha Media is a regional leader in online media and advertising sales. We anticipate that Internet Advertising Expenditure (“Adex”) in Malaysia and the region will grow by more than ten times over the next five years. With our current new media properties and brands, The Star is positioned to benefit from this change in the advertising landscape. Our investment in Catcha Media as a market leader will further strengthen our competitive edge in this sector.”

Catcha Media is presently a media owner and operator of a magazine publishing business and an online media business. The magazine publishing business currently publishes 14 magazine titles, while the online media business sells Internet advertising space to Malaysian brand owners and advertising agencies. Catcha Media also has exclusive sales rights for leading Malaysian website, Lowyat.net. In total, media properties controlled by Catcha Media currently reach 9.78 million Malaysians. Catcha Media’s revenue in 2010 was RM35.42 million and its profit after tax (PAT) was RM8.1 million.

Catcha Media management intends to use the majority of funds raised from their IPO exercise for working capital required for business growth and to fund the research and development of online technologies in line with the growth prospects of the Internet Adex space.

According to Frost & Sullivan, online Adex in Malaysia is expected to grow at a compound annual growth rate (CAGR) of 56.63% per year for the next five years. Frost & Sullivan also estimates that Catcha Media captured a 26.62% share of Malaysia’s online advertising market in 2010.

Moving forward, Catcha Media seeks to expand by way of acquiring more representation and sales rights for local and international online properties, while leveraging its magazine publishing business to grow its online media business.

Ho Kay Tat went on to comment, “We see in Catcha Media a group of managers who, like The Star, have demonstrated their long-term commitment to becoming leaders in their sector. They have more than twelve years experience in the online media sector and their vision for the business fits perfectly with ours.”

Catcha Media launched its IPO prospectus on 30 June 2011. Subscription for the public placement is open until 8 July 2011. Catcha Media is due to list its shares on Bursa Malaysia’s ACE Market on 22 July 2011. A copy of the prospectus relating to this offering may be obtained from Bursa Malaysia’s website (www.bursamalaysia.com) or Catcha Media’s website (www.catchamedia.com).

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