Satellite communications equipment provider Global Invacom Group (GInva) and vendor Tactilis Pte Ltd have decided to mutually terminate GInva's proposed acquisition of Tactilis Sdn Bhd.
In a filing to the Singapore Exchange (SGX) yesterday, GInva said that all fees, costs and expenses relating to the proposed acquisition would be borne equally by itself and the vendor. The break fee of US$20 million (S$27 million) under the sale and purchase agreement (SPA) is also being waived.
"There were difficulties in fulfilling all of the conditions precedent in the SPA," said GInva in the SGX announcement.
In October last year, GInva announced it had agreed to acquire Malaysia-based Tactilis in a deal that could result in a reverse takeover. Tactilis was then valued at US$200 million.
Tactilis' flagship product is a biometric solution known as the Tactilis Touch, which is said to capture fingerprints at least four times more accurately than its rivals, and can also carry out facial and iris recognition.
Mainboard-listed GInva was placed on the SGX watch list in June last year after recording a volume-weighted average price of less than 20 cents and an average daily market capitalisation of less than $40 million over the previous six months.
The proposed acquisition of Tactilis Sdn Bhd was entered into in hopes that it would give the company a new lease of life and support its application to be removed from the watch list.
Under the SPA, GInva was to have subscribed for convertible notes worth US$2 million for a 2 per cent stake in Tactilis and later acquire the remaining 98 per cent stake by issuing 1.8 billion shares priced at 15 cents per share, worth a total of US$196 million.
It also had the option to subscribe for another US$8 million worth of convertible notes for an additional 8 per cent stake, in addition to the initial 2 per cent stake. In that scenario, the remaining 90 per cent stake would then have been acquired via issue of 1.65 billion GInva shares at 15 cents per share for US$180 million.
In November last year, it was reported by The Business Times that three members of GInva's seven-member board voted against the transaction but that GInva was planning to push ahead with the deal.
While valued at US$200 million by Frost & Sullivan, Tactilis earned revenues of just US$31,925 in 2017 and US$3,600 in 2016. It also racked up losses of US$2.36 million and US$1.2 million in those years respectively.
Shares in GInva closed at 4.2 cents on Thursday, down 0.3 cent.