Malaysia’s digital media firm Catcha Digital is acquiring 92.5 percent stake in banking software firm Theta Service Partner for MYR 35 million ($7.9 million).
Catcha Digital said in a statement on Monday that its wholly-owned subsidiary Catcha Theta has entered into a conditional share sale agreement for the acquisition.
This strategic acquisition marks Catcha Digital’s expansion into the banking software solutions sector, specifically in loan origination software.
The acquisition is split into four tranches of MYR 5.9 million ($1.33 million), MYR 6.6 million ($1.49 million), MYR 11.2 million ($2.53 million) and MYR 11.3 million ($2.55 million) respectively.
The second, third and fourth tranche payments are tied to expected profit after tax of not less than MYR 3.5 million ($789,000), MYR 4 million ($902,000) and MYR 5 million ($1.12 million) for the financial year ended/ending 31 December (FYE) 2024, FYE 2025 and FYE 2026, respectively.
In FYE 2023, Theta and its subsidiaries recorded a profit after tax (PAT) of MYR 3.4 million ($768,000).
This transaction is expected to contribute positively to Catcha Digital’s earnings.
Theta is a provider of loan origination software for financial institutions through its flagship product ORIGINS – a lending solution that streamlines operations across retail, small and medium-sized enterprises (SME), and commercial segments.
The software offers features including automated credit assessment, multi-product support, workflow automation, and regulatory compliance capabilities, enabling financial institutions to process and manage their lending operations while maintaining compliance with complex regulatory requirements.
“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,” said Patrick Grove, Chairman of Catcha Digital.
According to him, Theta’s 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.
It is noted that Theta 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.
Over the past two decades, the firm has established itself as a 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, United States and the United Kingdom.
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, Catcha Digital opined that Theta is well-positioned to capture the expanding market opportunity in the region.
“Joining forces with Catcha Digital strengthens our ability to capture the significant opportunities we see in the banking software sector,” said Leong Kwok Hung, Managing Director of Theta.
He noted that over the firm’s past 25-year journey, it has 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,” he added.
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.
It said 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.
