Malaysia’s prominent entrepreneurs Patrick Grove, Khailee Ng, and Joel Neoh have scored another exit.

Today, Malaysian media giant Media Prima announced it has agreed to buy digital media company REV Asia from Catcha Group and Youth Asia for US$24.2 million. Catcha is co-founded and chaired by Grove, while Youth Asia is owned by Ng – who’s also managing partner of VC firm 500 Startups – and Neoh, co-founder of Fave (formerly Groupon Malaysia).

Media Prima is acquiring REV Asia to boost its digital content creation business amid difficulties in its traditional media segment, which includes TV, radio stations, and newspapers.

‘Justified’ acquisition cost

“This is a major milestone for both parties as it will see the combined group reach up to 10.4 million visitors,” Media Prima said, noting the figure falls behind only Google’s 15.7 million and Facebook’s 14.1 million visitors in Malaysia. It didn’t specify if the figures are on a monthly basis, although early this year, REV Asia told Tech in Asia it had roughly 5 million unique site visitors per month.

Led by Tze Khay Voon, REV Asia has 12 media sites targeting Malay, Chinese, and English-speaking audiences, covering news as well as a wide range of entertainment and lifestyle topics. Voon has been associated with Catcha for over a decade, holding roles across sales, advertising, and strategy.

Media Prima told Bursa Malaysia that REV Asia recorded a net profit of nearly US$970,000 as of the financial year ended December 31, 2016, while its assets amounted to US$6.3 million.

Those figures may seem small in relation to the acquisition cost but Media Prima stressed the cost “is justified in view of the potential earnings to be generated from [REV Asia] and the opportunity to expand the business of Media Pirma’s digital division by leveraging the internet social media industry.”

REV Asia was the product of a 2013 merger between Catcha Media and Says, one of the companies Ng and Neoh had built. The duo also co-founded Groupsmore, which was acquired by deals company Groupon as part of its foray into the Malaysian market in 2011.

When we last spoke to the REV Asia boss, he said Catcha owned 70 percent of the company, and the rest was held by Ng’s and Neoh’s firm.

Catcha, which runs classifieds websites throughout Southeast Asia, is known as one of Malaysia’s top internet companies. It owns automotive portal iCar Asia and video streaming service iFlix. Before the REV Asia sale, it struck a landmark deal selling property listing site iProperty to Rupert Murdoch’s REA Group for US$534 million in 2014.

Supplementing traditional media assets

“At Media Prima, we are big believers in digital content and its growth prospects for the future. The strategic acquisition of REV Asia demonstrates our firm commitment to capitalize on the growing demand for digital content amongst consumers by expanding our reach and further enhancing the group’s competencies in digital content marketing, digital content curation, and digital native marketing ads,” said group chief financial officer Encik Mohamaad Ariff Ibrahim.

According to The Star, Media Prima fell into the red in financial year 2016, reporting a loss of US$13.7 million, against a profit of US$32 million in the previous year. Its revenue for the year dropped 10 percent to US$300 million due to lower advertising and newspaper sales.

The transaction is subject to the fulfilment of certain conditions, including:

• the sell-off by REV Asia of its subsidiaries that have been “carved out,” or excluded from the deal
  
• the write-off of outstanding obligations owed by REV Asia to some of its units
  

Barring any unforeseen circumstances, the deal is expected to be completed by the third quarter of 2017, Media Prima said.