Donaco International (DNA.AX) revealed it plans to spinoff its mobile technology business, iSentric, into a new company separately listed on the ASX. The iSentric business is profitable, based in Kuala Lumpur, and was acquired by Donaco for $8.5 million in scrip (tiny!) in June 2013. It was founded by ex-Accenture consultants Aaron Lee and Roy Ng in 2003. iSentric specialises in mobile micropayments for digital content, via partnerships with telco operators. Key clients include Huawei, Digi and Celcom. In order to implement the spinoff, Donaco has signed an agreement to transfer the iSentric business into OMI Holdings (OMI.AX), valuing iSentric at ~$12mm. Donaco will then spin off OMI to its shareholders (with ~90% ownership, previous OMI shareholders/convertible note holders will hold ~10%). The transaction has to be approved by OMI shareholders at an extraordinary general meeting currently proposed to be held in May 2014.
Donaco’s 2013 annual report is available online (Link). It’s fiscal year ended June 2013. Management touted its recent iSentric acquisition as a “core” of its gaming technology division yet has decided to spin it off within a year of its purchase. The Company generated $470k in rev and $65k in EBIT (13% EBIT margin) between January and June of 2013. Of its $8.5mm book value, $7.3mm is solely goodwill. The company released half year results today (2/25) but unfortunately it did not break out iSentric specifically. Donaco combines iSentric with another unit (way2bet) into its “gaming technology division” that generated $3.3mm and EBITDA $0.4mm. It’s half year results are available (here).
Source: Donaco to Spin Off Mobile Technology Business (Link)
