Latin Gold has become the latest resources company to target the technology sector, with intentions to acquire a social networking platform developed by Steven Goh.
Latin Gold has become the latest resources company to target the technology sector, with intentions to acquire a social networking platform developed by Steven Goh.
The company has entered into a heads of agreement to buy mig33, a social networking platform Mr Goh has helped develop and grow in emerging markets.
Latin Gold’s current share price values the deal at around $19 million following a jump from less than 1 cent to 2 cents in recent days with an additional 35 per cent gain to 2.7 cents today.
Mr Goh established Australia’s first online stockbroking company, Sanford Securities, from Perth in the late 1990s.
The operation grew to service 160,000 customers and had more than $2.4 billion in customer assets before hitting cash flow problems.
It was ultimately bought by IWL Limited in 2003, at which time Mr Goh began to establish his social networking company, Project Goth.
mig33 was launched in 2006 from Perth as its flagship product, and two years later Mr Goh moved to Silicon Valley to build on initial traction.
In 2010, the company was relocated to Singapore as the social networking site became more popular in emerging markets in South Asia and South-East Asia.
It currently has more than 3 million monthly active users and Mr Goh told Business News it was positive news that he would be reuniting with Western Australia.
"It's great to reconnect with the investing public back in Western Australia," Mr Goh said.
"One of the great things about Australia is that people do understand emerging markets, especially the mining and resource sector."
On completion of the deal Mr Goh and three other mig33 directors will join the Latin Gold board - forcing the resignation of three existing Latin Gold directors.
Latin Gold shareholders will have a 30.5 per cent stake in the merged entity with mig33 shareholders holding the controlling 69.5 per cent.
Those major shareholders include Mr Goh (who will take around 13 per cent of the merged company), Singaporean venture capital fund Digital Media Partners, and Indonesian investor group Escomindo.
Latin Gold said mig33’s revenue model of charging users for virtual games and gifts made it an attractive proposition and gave shareholders access to a “significant growth opportunity” in the IT sector.
Today’s announcement has echoes of a tech-focused strategy by Spencer Resources, which has today relisted on the ASX as cloud computing company Bulletproof Group, following a reverse takeover.
The agreement for Spencer to acquire Bulletproof put a valuation of approximately $14 million on the private company.
It’s understood to be the first company in Australia to launch a public cloud-based service, in 2006.
Spencer Resources also conducted a $2.8 million capital raising in light of the proposed takeover, which was heavily oversubscribed.
A third resources company, West Perth-based Minerals Corporation, has also jumped on an opportunity to enter the technology sector through the acquisition of cloud computing company PRM Cloud Solutions.
It’s in the process of finalising the deal, giving PRM shareholders 650 million shares in Minerals Corporation in return for total ownership.
During its six years in business, PRM has specialised in creating technology applications for use in the resources sector, such as MiCloud.com, which looks at workforce mobilisation and management.
Its clients include Rio Tinto, McMahon, Downer EDI, Inpex, Western Power, Serco and Exxon Mobil.
And it’s not just resources companies looking to the tech sector for future growth; last month, former agricultural investor AACL Holdings relisted as Applabs Technologies, taking on the name of the company it acquired.
AACL had been on the lookout for investment opportunities and appointed Perth-based founder of InGenius Labs Stuart Kidd as managing director.
