Invigor to expand Asian e-commerce presence through acquisition of Sun Asia Group
The acquisition of Sun Asia Group brings Invigor revenue from Australian-farm produce supply contracts in Asia as well an order book worth potentially over $30m.
Data analytics company Invigor Group (ASX: IVO) has announced it will acquire Australian produce manufacturer Sun Asia Group in a bid to significantly grow its revenue and strengthen its Asia-focused e-commerce operations.
The $2 million transaction will combine Invigor’s technology platform – comprising pricing insights, loyalty and e-payments – with a large WeChat Pay-powered retail distribution footprint in China established by its business partner Winning Group Holdings, and an entrenched supply chain built by Sun Asia.
Invigor said the acquisition will “complement and significantly expand” its growing WeChat Pay operations in Asia to include the direct sourcing and subsequent sale of Australian produce through Winning Group’s established China network.
The network is forecast to grow by year end to comprise over 5000 EasyGO staffless convenience stores with artificial intelligence-enabled, self-service kiosks and WeChat Pay facilities.
Sun Asia has existing contracted sales for Australian produce and has booked $30m in expected sales over the coming 12 months.
WeChat is owned by Hong Kong-listed technology giant Tencent Holding Limited, and is one of the most popular payment and social platforms in China with over 1 billion active users.
Acquisition terms
Consideration for Invigor’s acquisition of Sun Asia will comprise a $250,000 cash payment and $500,000 in share-based payments through the issue of 125 million shares at $0.004 per share with a six-month escrow.
It will also include $1.25m in issued performance shares and options exercisable at $0.005 and expiring three years from issue.
The performance shares will vest based on Sun Asia Group generating at least $3m of gross profit by December 2020.
Once complete, the acquisition will allow for the delivery of produce sourced from accredited farms across Australia to the Asian market, under the Sun Asia name.
Farm-to-plate strategy
Invigor chief executive officer Gary Cohen said the acquisition will build on Sun Asia’s farm-to-plate strategy.
“This transaction expands our operations in Asia and marries our technology platform, a robust e-commerce and payments operation with a well-established supply chain of fresh Australian produce from the farm gate to consumers in China and Asia,” he said.
“Bringing Winning Group’s retail distribution network and payments capability to the equation allows us to create an incredibly powerful WeChat Pay-enabled operation which connects Australian farmers directly to overseas buyers.”
At midday, shares in Invigor Group were up 66.67% to $0.005.