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Catcha Digital acquires 60% of Drive 2 Digital for US$3.6mil to expand into automotive digital media | Digital News Asia

Catcha Digital acquires 60% of Drive 2 Digital for US$3.6mil to expand into automotive digital media

Catcha Digital acquires 60% of Drive 2 Digital for US$3.6mil to expand into automotive digital media

Catcha Digital acquires 60% of Drive 2 Digital for US$3.6mil to expand into automotive digital media

  • Paid over three tranches across 24 months, subject to meeting PAT targets
  • Enters Chinese, Malay language automotive content & digital media market

(Standing L to R): Chin Yi Hong, Investment Analyst of Catcha Digital; Cedric Lee, VP, Investments, Catcha Digital; Oscar Ong, VP, Investments, Catcha Digital; Ivan Choy Ewi Liang, Editor of Automachi Digital & Auto123 Media; Irwan Asri, Managing Editor of Mekanika; Lee Ying Hao, Production Manager of Drive 2 Digital. (Seated L to R): Jacky Tee, CFO of iMedia Asia; Eric Tan, Group CEO of Catcha Digital; Dannis Tan Boon Fhong, CEO & Co-founder of Drive 2 Digital; Jackie Wong Yong Wee, COO & Co-founder of Drive 2 Digital.

Catcha Digital Bhd announced on 20 Dec that iMedia Asia Sdn Bhd, a wholly-owned subsidiary of Catcha Digital, has entered into a share sale agreement to acquire a 60% interest in Malaysian automotive digital media company, Drive 2 Digital Sdn Bhd (D2D) for a cash consideration of US$3.59 million (RM16.2 million).

The cash is payable in three tranches across 24 months and is tied to the achievement of the expected profit after tax (expected PAT) over the period of 24 months after completion of the sale and purchase of shares date, broken down into expected PAT of US$776,000 (RM3.5 million) and RM4.2 million for the period of 12 months after completion date, and the period from 13 to 24 months after Completion date, respectively.

This strategic acquisition marks Catcha Digital's expansion into the automotive digital media sector, specifically in Chinese and Malay language automotive content. This transaction is expected to contribute positively to Catcha Digital's earnings in the future.

D2D was co-founded by Dannis Tan Boon Fhong (CEO) and Jackie Wong Yong Wee (COO) in 2018 and it has been profitable since its inception. It manages four automotive media brands: Automachi, Auto123, Careta, and Mekanika.

The network claims a combined monthly reach of approximately 1 million website unique visitors, 10 million web visits, 32 million Facebook post reach, and 45 million video views across Instagram, TikTok and YouTube. This reach complements Catcha Digital’s existing monthly reach of 20 million across its websites and social media channels.

According to Catcha Digital, the acquisition provides significant cross-selling opportunities between its existing advertising client base and D2D's clientele. Catcha Digital and its subsidiaries (Catcha Digital Group) will be able to offer D2D's automotive-focused solutions to its clients while D2D can leverage Catcha Digital Group's digital advertising capabilities and broad reach to enhance its offerings.

"We are excited to work with Dannis and his team to propel the growth of the business. This acquisition marks a natural extension for Catcha Digital’s digital media arm to enter the automotive content category. D2D has built an impressive track record in Chinese and Malay automotive content, with strong relationships across major brands in the automotive sector such as Mercedes-Benz, Mazda, Toyota, Honda, BYD, Continental and Michelin. With the automotive industry increasingly shifting towards digital channels, the combination of D2D's automotive expertise and iMedia's digital capabilities creates compelling opportunities. Together, we are uniquely positioned to redefine how automotive brands connect with consumers across ASEAN," said Patrick Grove, Chairman of Catcha Digital.

"Joining forces with Catcha Digital represents an exciting new chapter in D2D's growth story. Since 2018, we have built Malaysia's leading automotive media network across Chinese and Malay segments, reaching over 60 million views monthly across its platforms. This partnership with Catcha Digital will accelerate our expansion plans in multiple ways - from growing our existing digital media brand to strengthening our influencer marketing capabilities, and potentially expanding into the English language market. The ability to tap Catcha Digital’s existing clientele will also be a key lever of value creation for us," said Boon Fhong.

The proposed acquisition aligns with Catcha Digital's vision to build the leading digital group in ASEAN, targeting the region's fast-growing digital economy, estimated to hit US$263 billion (RM1.18 trillion) in GMV by 2024 according to Google, Temasek, and Bain & Company's 2023 SEA e-Conomy report.

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