FDV Raises Fresh Capital as It Acquires Remaining Shares of Encuentra24

The international online classifieds operator Frontier Digital Ventures (FDV) has today announced that it has entered into an agreement to acquire the remaining 73.7% of leading Central American generalist classifieds portal Encuentra24.

FDV already owns 26.3% of Encuentra24 and will be purchasing an additional 37.5% from OLX Group, with whom Encuentra24 entered into a partnership deal last year, as well as the remaining 36.2% from the founders. OLX's shares are set to cost the Malaysian headquartered company $9.2 million while the founders' shares are subject to performance-based earn-out conditions.

Founded in Panama in 2005 by Boris Métraux and Wendy Jordan, Encuentra24 is today the leading classifieds player across Central America having effectively seen off its greatest rival via the deal with OLX in 2020. FDV initially invested in Encuentra24 in 2015 with a subsequent follow on investment following a strong performance in 2016. Métraux and Jordan will remain in their current positions and are expected to continue to manage the operations of the businesses through to the end of FY22.

Encuentra24 has a strong position in the lucrative verticals of cars and real estate and is expected to reap the benefits of both a C-2-C transaction model which is in its infancy as well as significant synergies arising from collaboration with FDV's other Latin American assets, notably with Uruguay based InfoCasas which uses proprietary technology to power each step of the transaction journey in the primary real estate market.

FDV's CEO, Shaun Di Gregorio alluded to the potential of his company's newly consolidated Latin American assets in a statement:

“We are excited to be increasing our ownership in Encuentra24, where we believe there is significant potential to accelerate its revenue growth. This transaction is expected to unlock the value of FDV LATAM with 100% ownership and control, enabling the sharing of our transaction model IP and technology across the region."

FDV now fully owns four leading online classifieds titles across Latin America. Last year the ASX listed company acquired Colombian real estate vertical Fincaráiz and Chilean generalist Yapo from Adevinta and bought out the remaining shares in the existing portfolio company InfoCasas.

Frontier Digital Ventures also owns shares in many other online classifieds assets across several geographical regions in emerging markets. Although not specifically discussed in detail in a press release circulated to journalists today, there have been reports that the company plans to divide its operations into three geographical divisions: LATAM, MENA and SE Asia, with Di Gregorio confirming that the internal changes have been proposed:

"FDV LATAM represents a significant standalone business under FDV Group’s proposed new regional structure, with an attractive long-term growth profile and optionality in relation to future value realisation opportunities."

Aside from the news that the company has purchased the remaining shares of Encuentra24, FDV also announced today that its purchase of those shares has been funded by an institutional placement which successfully raised A$35 million at an offer price of A$1.50 per share. The placement included participation from emerging markets funds across North America, Asia and Europe

"While always very mindful of dilution to existing shareholders, we saw this measured capital raising as an opportunity to broaden our shareholder base. We are grateful for the ongoing support shown by our institutional shareholders and are delighted to welcome several specialist emerging market funds from North America, Asia and Europe." commented Di Gregorio.

In addition to funding the purchase of Encuentra24, the funds will also serve towards funding an active M&A pipeline for a company that has seen its share price increase by more than 200% since 2019 as many of its portfolio classifieds companies become profitable.