Published March 20, 2008

1st Software plans $175m acquisition of property firm

It will issue new shares to acquire Teambuild in reverse takeover deal


IN a bid to retain its listing status, 1st Software is acquiring a construction and property development firm for $175 million in a reverse takeover deal.

1st Software entered into an agreement with Teambuild Corporation yesterday to acquire it through the issue of about 10.94 billion new 1st Software shares at 1.6 cents each, which will give the vendors of Teambuild an approximately 85 per cent stake in 1st Software's enlarged capital.

Teambuild, which has offices in Singapore and Malaysia, is a privately-held company specialising in property development and building construction.

The firm's current business is made up of a mix of public and private residential developments, as well as institutional and upgrading projects.

Another reason for the proposed acquisition is that it will allow the company to participate in the business of property development and building construction based primarily in Singapore with a strong growth potential, said 1st Software.

Under the deal, Teambuild provided a post-tax profit guarantee of at least $8 million for FY2007 and $20 million for FY2008.

For its 2007 financial year, Teambuild may declare dividends out of its reserves of not more than $10 million. If Teambuild fails to meet its profit targets, the vendors will have to pay 1st Software for the shortfall.

The acquisition is subject to regulatory and shareholder approval. It is also contingent on other prevailing conditions including the ability to secure a $2 million loan to finance the buyout. An application has also been made for waiver from a general offer. Shares of 1st Software have been suspended since Dec 26, 2006, following the sale of its core digital publishing business earlier in the year.

In a bid to find a new venture to maintain its listing, the company had tried to acquire Hong Kong commodities trading firm Psons Ltd through a $67.95 million reverse takeover deal in November 2007 but the transaction eventually fell through.