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After curious reverse takeover, Singapore’s Yuuzoo buys games provider IAHGames

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Among tech startup circles in Singapore, Yuuzoo is not a tech company that’s particularly well-known.

But the social media and e-commerce firm, which even has a Square-like mobile point-of-sales system, recently caused a small blip on the radar by completing a reverse takeover of public-listed but declining  hardware company Contel, paving the way for an entry into the Singapore Stock Exchange. The deal gives Yuuzoo majority ownership of Contel, valued at USD 582.3M.

Contel’s share price has remained at USD 0.08 since the announcement.

It isn’t stopping there. Now comes news that Yuuzoo has made another acquisition, this time a cash and share deal with IAHGames, a games distributor and operator in Singapore.

While terms of the deal were undisclosed, we do know that IAHGames has in fact been a client of Yuuzoo, with the latter having developed a social network for IAH’s millions of users.

A public listing has been on the cards for Yuuzoo for a couple of years. Its supposedly confidential Information Memorandum for investors has been uploaded on Slideshare since last year, revealing valuable nuggets of information about the company.

It made USD 18M in revenues for Financial Year 2011, USD 3M more than in 2010. Its net profit is about USD 7M, or 40 percent of income. The money is generated through a combination of content sales, transaction fees from its payments platform, app development, and mobile advertising.

The document also paints a healthy picture of the company, valuation-wise. Its pre-money valuation of USD 81M in 2011 has ballooned to USD 400M, based on a projected net profit of USD 10M.

A P/E ratio of 40 is on the high side — but such inflated valuations are rather commonplace for pre-IPO companies anyway. Dropbox, for instance, is valued at USD 4B based on a net profit of USD 133M — a P/E ratio of 30.

The leaked document:



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