Singapore eDevelopment sells HotApps to US company for $876 mil in shares and bonds

Fragmented Industry Exchange Inc., a US company pending quotation on an over-the-counter bulletin board, is planning to acquire a wholly-owned instant messaging (IM) software subsidiary of Singapore eDevelopment for US$700 million ($875.7 million) in shares and bonds.

SGX Catalist-listed Singapore eDevelopment said the proposed transaction will enable HotApps International to tap the US capital market and facilitate the launch of the HotApp IM and e-commerce mobile application in North and South America.

Singapore eDevelopment acquired HotApps last month and plans to launch it in 24 countries, including Singapore, before the year end.

Under the acquisition deal, the company has entered into a term sheet for FIE to acquire HotApps for 1 million new shares at US$10 each (US$10 million) and US$690 million worth of zero-coupon perpetual bonds (with a conversion price of US$10 each).

The proposed transaction, upon completion, will result in SeD owning 99.84% of FIE assuming full conversion of the bonds and the exercise of a call option (assuming FIE does not issue any new shares). FIE will in turn hold HotApps as a wholly owned subsidiary.

“North America is a market which has not only embraced such technologies but has a pool of investors who are willing to invest in such applications,” said Chan Heng Fai, Singapore eDevelopment’s Chief Executive Officer and its single-largest shareholder. “This transaction will bring with it two significant benefits. The first is that HotApps will be able to tap the U.S. capital markets to fund its growth. The second is that we will be able to accelerate the launch of HotApp in the U.S. and Latin American markets,” adds Chan.