PayMate Announces Intent to Acquire DigiAsia

Rhea-AI Summary

PayMate India has announced its intent to acquire DigiAsia Bios Pte , a subsidiary of DigiAsia (NASDAQ: FAAS), in a deal valuing DigiAsia at US $400 Million. This strategic move marks PayMate's entry into the Indonesian market, promising immediate market share expansion. The company plans to invest up to US $25 Million in cash post-acquisition, with the final financing structure to be mutually agreed upon.

The binding term sheet initiates a 60-day period for due diligence, structure finalization, and necessary approvals. Following the acquisition, PayMate aims to list the combined entity in India, targeting a 2025 public listing. This acquisition aligns with PayMate's growth strategy, leveraging DigiAsia's strong presence in the Fintech-as-a-Service (FaaS) sector in Indonesia.

Positive

• Acquisition valued at US $400 Million, indicating significant market potential
• Immediate expansion into Indonesian market
• Plans for additional US $25 Million investment post-acquisition
• Targeting 2025 public listing in India for the combined entity

Negative

• 60-day due diligence period introduces uncertainty
• Potential integration challenges in merging two companies
• Financial strain from the acquisition and additional investment

Insights

Financial Analyst

This potential acquisition marks a significant strategic move for PayMate, valuing DigiAsia at $400 million. The deal would give PayMate immediate access to the Indonesian market, a key growth area in Southeast Asia. The $25 million additional investment signals confidence in the combined entity's potential. The planned 2025 public listing in India could provide liquidity for investors and fuel further expansion. However, investors should note that the deal is not yet finalized, with a 60-day due diligence period ahead. The transaction structure and financing terms are still to be determined, which could impact the final valuation and deal terms. For FAAS shareholders, this represents a potential exit strategy, but the impact on share price will depend on the final deal structure and market reception.

Market Research Analyst

This move aligns with the growing trend of consolidation in the fintech sector, particularly in emerging markets. Indonesia, with its large population and increasing digital adoption, presents a significant opportunity for PayMate's B2B payment solutions. The acquisition could create synergies between PayMate's expertise and DigiAsia's established presence in Indonesia. The combined entity would be well-positioned to compete with other regional fintech players. However, integration challenges and regulatory hurdles in both India and Indonesia could pose risks. The planned Indian listing by 2025 suggests a long-term growth strategy, potentially attracting investors interested in the Southeast Asian fintech market. This deal could spark further M&A activity in the sector as companies seek to expand their geographical footprint and service offerings.

Valuing DigiAsia at US $400 Million

Introduces PayMate in Indonesia with Immediate Market Share Expansion, Targeting 2025 Public Listing

MUMBAI, India and NEW YORK, Sept. 24, 2024 (GLOBE NEWSWIRE) -- PayMate India (“PayMate”), a leading provider of B2B payments and services with reputable investors such as Visa & Lightbox, today announced that it has entered into a binding term sheet (the “Proposed Transaction”) for the potential acquisition of DigiAsia Bios Pte Ltd., Singapore, a leading Fintech-as-a-Service (FaaS) company in Indonesia and a fully owned subsidiary of DigiAsia Corporation (NASDAQ: FAAS) (“DigiAsia”).

Under the terms of the Proposed Transaction, an enterprise valuation of US $400 Million for DigiAsia’s business has been determined. Additionally, post the Proposed Transaction, PayMate intends to invest up to US $25 Million in cash, the aggregate financing structure and terms will be finalized in mutual agreement. PayMate and DigiAsia will continue joint due diligence on both entities, identification of the right transaction structure, entering into definitive agreements and the necessary corporate and regulatory approvals of PayMate and DigiAsia which is expected to take up to 60 days. Subsequent to the closing of the Proposed Transaction, PayMate intends to initiate proceedings to list the combined entity in India.

About PayMate

PayMate India Ltd – a leading digital B2B payments company that empowers businesses of all sizes to enhance financial efficiency and streamline B2B payments. The platform simplifies and digitizes B2B payment processes, optimizing working capital, and ensuring timely supplier payments. PayMate's solutions encompass Accounts Payable, Accounts Receivable, Invoice Discounting, Cross Border and Embedded Finance. In FY24, PayMate processed USD 10.5 billion in transactions, serving over 522,000 customers worldwide. With a strong presence in India, CEMEA, and APAC regions, PayMate is the trusted partner for businesses seeking to streamline payment processes.

For more information, visit https://paymate.in/ or follow us on LinkedIn.

About DigiAsia

DigiAsia is a leading Fintech as a Service (FaaS) provider operating a B2B2X model offering its complete Fintech solution in emerging markets. DigiAsia's fintech architecture offers small and medium business enterprises (SMEs) comprehensive embedded finance APIs to streamline processes across the commerce value chain of distributors and customers. DigiAsia's embedded fintech solutions equally address democratizing digital finance access that supports financial inclusion of underbanked merchants and consumers in emerging markets resulting in growth for enterprise business. The suite of B2B2X solutions provided by DigiAsia include, but are not limited to, cashless payments, digital wallets, digital banking, remittances and banking licenses. DigiAsia has recently established a strategic initiative to develop its embedded FaaS enterprise solution with AI capabilities in Southeast Asia, India, and the Middle East, with plans for global expansion. For more information, please visit DigiAsia’s Corporate website here or Investor Relations website here.

Forward-Looking Statements:

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “anticipate”, “project”, “targets”, “optimistic”, “confident that”, “continue to”, “predict”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. All statements other than statements of historical fact are statements that may be deemed forward-looking statements. These forward-looking statements including, but not limited to, statements concerning DigiAsia and the Company’s operations, financial performance and condition are based on current expectations, beliefs and assumptions which are subject to change at any time. DigiAsia cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors such as government and stock exchange regulations, competition, political, economic and social conditions around the world including those discussed in DigiAsia’s Form 20-F under the headings “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business Overview” and other reports filed with the Securities and Exchange Commission from time to time. All forward-looking statements are applicable only as of the date it is made and DigiAsia specifically disclaims any obligation to maintain or update the forward-looking information, whether of the nature contained in this release or otherwise, in the future.

PayMate Contact	DigiAsia Company Contact:
Vishvanathan Subramanian	Subir Lohani
Wholetime Director & Chief Financial Officer	Chief Financial Officer and Chief Strategy Officer
91-22-2661 6178	646-480-0142
Email: corporate@paymate.co.in	Investor Contact:
	MZ North America
	Email: FAAS@mzgroup.us

FAQ

What is the valuation of DigiAsia in PayMate's acquisition intent?

PayMate has valued DigiAsia at US $400 Million in their intent to acquire the company.

How much additional investment does PayMate plan post-acquisition of DigiAsia (FAAS)?

PayMate intends to invest up to US $25 Million in cash following the acquisition of DigiAsia.

When does PayMate aim to list the combined entity after acquiring DigiAsia (FAAS)?

PayMate is targeting a 2025 public listing in India for the combined entity following the acquisition of DigiAsia.

What is the timeline for completing the acquisition process of DigiAsia (FAAS) by PayMate?

The acquisition process, including due diligence and approvals, is expected to take up to 60 days from the announcement date.