HotCopper strikes $22m Canadian takeover deal

Share market online chat forum HotCopper Holdings will venture into the North American market after signing a deal to acquire its Canadian equivalent, as it seeks to bounce back from a fiscal 2019 loss.

Perth-based HotCopper, which has a market cap of $19.3 million, will buy Stockhouse Publishing from Cherubim Investment for up to $C20 million ($22.3 million).   

HotCopper will pay $C16 million in cash and $C2 million in shares upfront, with $C1 million cash payable six months after the acquisition is complete, and a further C$1million if Stockhouse achieves revenue targets.

The deal will be funded by a $C11 million bank loan and a partly underwritten $6.95 million rights issue.

The rights issue will be conducted at 13 cents per share, with CPS Capital Group underwriting the offer to $3.6 million.

This is a 24 per cent discount to its previous closing price.

HotCopper said the combined business would service approximately 2 million investors across 400 listed companies.

Stockhouse has around 1 million visitors a month, according to HotCopper.

HotCopper managing director Jag Sanger said the acquisition would give the company the leading media position on two of the world’s largest stock exchanges.

“It’s a key step in delivering on our vision of a global financial news and investor relations platform for self-directed wealth,” he said.

For 2019 financial year, HotCopper reported a loss of $35,375, compared with a profit of $1.12 million in the prior corresponding period.

This loss was from revenue of $4.25 million, down 14 per cent on the year previous. 

Shares in HotCopper were up 5.9 cents to trade at 18 cents each at 12.45pm AEST.