The Fatfish Group Ltd (ASX: FFG) share price has started the week in a positive fashion.
In morning trade, the tech venture company's shares are up over 12% to 13.5 cents.
Why is the Fatfish share price rising?
The Fatfish share price was given a boost this morning from the release of an acquisition announcement.
According to the release, the company has entered into a binding agreement to acquire a strategic 85% stake in Malaysia-incorporated Forever Pay. It is a licensed corporate entity that holds a money lending license awarded by the Malaysian government.
Following the acquisition, Fatfish intends to enter into the retail buy now pay later (BNPL) and other consumer-oriented digital financing markets via Forever Pay. It also plans to develop potential synergies and collaboration with its existing BNPL business, Smartfunding.
Management notes that acquiring Forever Pay will allow Fatfish to further position the company as a comprehensive BNPL player in the Southeast Asia region.
What is Forever Pay?
The release notes that Forever Pay was incorporated seven months ago in September 2020 and has been awarded a Money Lending License by the Ministry of Housing And Local Government of Malaysia.
This Lending License allows financing operations for consumers and corporates to be conducted, including retail BNPL services.
Fatfish will acquire its 85% stake in Forever Pay for a total purchase consideration of A$870,000.
From this, A$450,000 of the consideration will be paid in cash, while the remaining A$420,000 will be paid via the issue of 3 million Fatfish shares. The cash portion of the consideration will be paid over a duration of 12 months from existing reserves.
The company notes that the current shareholder of Forever Pay is VNP Technology and is not related to Fatfish or its directors.