Latitude to buy Yatango in $18m deal

24/03/2015 - 11:40

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Shares in copper miner Latitude Consolidated skyrocketed on news it plans to exit the resources sector with a proposed acquisition of consumer services technology company Yatango through a scrip deal valued at about $18 million.

Latitude to buy Yatango in $18m deal

Shares in copper miner Latitude Consolidated skyrocketed on news it plans to exit the resources sector with a proposed acquisition of consumer services technology company Yatango through a scrip deal valued at about $18 million.

Under the terms of the deal, Latitude will offer Yatango's current owners 1.2 billion shares, and a $250,000 loan to gain full ownership of the company.

The combined entity will retain Yatango’s name and business model, and will be listed on the ASX.

Yatango is a cloud-based software, services and analytics platform that has launched two product verticals; Yatango Mobile and Yatango Shopping.

The acquisition is subject to a number of conditions, including Latitude completing a capital raising of at least $6 million, which is necessary to comply with ASX re-listing rules.

Prior to that, it will also undertake an entitlement issue of up to $845,100 to raise funds to pay for costs associated with due diligence and the acquisition.

Latitude said it intended to appoint Azure Capital and Foster Stockbroking as joint lead managers to the raising and entitlement issue.

Yatango will also be required to settle a $1 million loan to another party through the issue of shares, and also issue $1 million worth of secured convertible notes, priced at a 20 per cent discount to the planned capital raising.

If the deal is successful, existing Latitude directors Morgan Barron, Tim Moore and Roger Steinepreis will resign and Yatango will appoint a minimum of three directors of its choosing to the board, two of whom will be John Wilkinson and Yatango founder Andy Taylor.

Existing Latitude director John Richards has already tendered his immediate resignation from the board.

Latitude chairman Mr Moore encouraged shareholders to review the acquisition proposal with interest.

“This type of business is extremely difficult to find let alone have the chance to invest,” Mr Moore said.

Yatango operates in the expanding crowd and mobile space with a high growth mass affluent lifestyle brand, custom designed for digital natives, which has the capacity to be scaled globally.”

Mutual due diligence is scheduled to be completed by April 1, with a relisting date set at June 19.

Latitude shares were 122.2 per cent higher at 2 cents per share at 11:30am.

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