Logiq Inc has told investors that its board of directors has approved a plan to separate its DataLogiq and AppLogiq businesses into two independent publicly traded companies.
The company said following a strategic review of its growth strategies and structure, the board determined that creating two standalone businesses would best position DataLogiq and AppLogiq to capitalize on their respective growth opportunities in the rapidly evolving global e-commerce and fintech landscape.
It would also be the best path to creating shareholder value.
“We believe separating AppLogiq and DataLogiq into two ‘pure-play’ publicly-traded companies would unlock additional value for our shareholders,” Logiq President Brent Suen said in a statement.
“As independent companies, each would have a sharper focus and greater flexibility to pursue M&A opportunities in their respective markets for e-commerce in the US and fintech markets in Southeast Asia.”
READ: Logiq engages The Benchmark Company to explore restructuring initiative
Under the plan, the company said AppLogiq will be acquired by another existing or newly formed publicly-traded company. The AppLogiq segment includes mobile e-commerce solutions, a recently announced mobile fintech platform for microlending, and the company’s beneficial stake in PT Weyland Indonesia Perkasa (WIP). WIP is the operator of the AtozGofood delivery service and AtozPay mobile e-wallet.
It noted that there are several companies in emerging markets that it has partnered with that are currently reviewing a potential acquisition of, or merger with, AppLogiq. Such a transaction could form a substantial platform for digital services to be offered in high-growth emerging markets, it added.
“We see this also enabling considerably higher peer valuations compared to where Logiq is at today with AppLogiq and DataLogiq combined,” Suen said.
“As one analyst recently pointed out, for Logiq, ‘the sum of the parts is greater than the whole.’ Based on comparable public market valuations and private equity funding for companies in the emerging markets fintech sector, it would imply that AppLogiq’s standalone valuation could justify $100 million.”
Logiq recently announced engaging a leading US investment bank, The Benchmark Company, to assist with the transaction and potentially others. It plans to complete the separation before the end of the year, subject to customary conditions and approvals.
New York-based Logiq is an international e-commerce and fintech solutions provider. Its DataLogiq business provides a data-driven, end-to-end e-commerce marketing solution. Its AI-powered LogiqX data engine delivers valuable consumer insights that enhance the ROI of online marketing spend. The company’s Fixel technology offers simplified online marketing with critical privacy features.
Contact the author at stephen.gunnion@proactiveinvestors.com