Conquest Agri : signs Stock Purchase Agreement to acquire Property Connect Inc.

bb4c4082d5c4d128e3d206.pdf

9 October 2015

Australian Securities Exchange Limited Perth WA

By: e-lodgement

COMPANY ANNOUNCEMENT For immediate release

Conquest Agri Limited signs Stock Purchase Agreement to acquire Property Connect Inc.

The Directors of Conquest Agri Limited (CQA) are pleased to announce that CQA has entered into a Stock Purchase Agreement (SPA) to acquire 100% of the shares of Property Connect Inc. (PCI) (the Transaction).

As the Transaction involves a change in the nature and scale of the Company's activities, the Transaction is conditional on the approval of CQA shareholders at a general meeting to be held on or about 14 December 2015 (General Meeting). A Notice of Meeting will be sent to CQA shareholders in due course.

As part of the Transaction:

• CQA is seeking to raise at least $2,500,000 by way of a public offer under a prospectus which will be issued in due course; and

  
  

• CQA will implement a 1:18.5111 share consolidation of its existing share capital. This share consolidation will occur following shareholder approval at the upcoming General Meeting. Accordingly, all share issues both under the Transaction and under the capital raising will be done on a post consolidation basis. Based on the price of the most recent capital raising and consolidation the share value used for the Transaction and capital raising is $0.05 per share (subject to ASX approval).

  
  

• The founder of PCI Timothy Manson will be appointed CEO of CQA.

  TRANSACTION HIGHLIGHTS:

  
  

• Transaction gives shareholders exposure to the large US multi-family rental market. The market size in the US for the multifamily apartment sector alone (PCI's initial target market) exceeds 30m apartments and 16.2m executed leases.

  
  

• In the U.S. Multifamily Residential property refers to single title, multi unit, leased and professionally managed residential real estate. Multifamily is the most secure real estate sector in the U.S. and communities often feature a resort style clubhouse and pool, landscaped grounds and average 200 apartments in size.

  
  

  Advantages of Multifamily for renters include:

  
  

  • Flexible lease terms
  • Maintenance free living

    
    

  • Ability for renters to move during lease term between apartments and/or communities under the same management group

    
    

  • Wide range of premium amenities

    
    

  • Professional onsite management

    
    

• Other markets such as Student Housing and Senior Living also targeted

  
  

• Access to US and International Patents pending intellectual property (LiveOffer™). LiveOffer™ maximises rental yield for the multi-family manager while providing real time pricing and competitive transparency for prospective renters

  
  

• Annuity revenue model for each rental transaction, along with upfront set-up and subscription fee per multi-family community
• Highly experienced senior management experience with over 30 years in the multi-family industry

  
  

• Upfront acquisition valuation for PCI of A$6m with a further $4m available to the vendors in performance-based earnout

CQA Chairman Peter Papas commented that '…the CQA Board are firmly of the belief that the Property Connect transaction has the potential to be a high-quality outcome for all stakeholders. The US multi-family market size is significant. PCI have developed a technology to capitalise on this and other relevant property rental market segments. The Property Connect executive team have deep multi- family industry experience.'

Property Connect Founder and CEO Tim Manson said '...we are excited at the prospect of becoming an ASX-listed company and following the successful path of other recent US-based technology companies listing on the ASX. We believe in our technology and its commercial application in the US multi-family and associated property rental markets...'

1. About Property Connect

   
   

   PCI is a USA company based in San Francisco that operates an online rental property service through its proprietary LiveOffer™ online platform that allows renters to place an offer on a property and see in real time where they are placed against other applicants.

   
   

   • PCI provides a real time bidding platform for rental properties in the USA. The market size in the US for the multifamily apartment sector alone (PC's initial target market) exceeds 30m apartments and 16.2m executed leases.

     
     

   • The disruptive value add of the platform is the ability to deliver transparency for the renter when searching for a new residence while maximising leasing revenue by creating real time pricing. A proprietary algorithm presents the best offer to the leasing professional based upon a number of variables including lease term, price, move in date and more.

   • Initially PCI will target Multifamily and Student Housing Property Management Groups and has a number of organisations using PCI in beta testing with positive results. Other US property sectors will be progressively targeted by PCI and its disruptive live rental bidding platform.

     
     

   • The sales activities of the company are led by Bill Lopez. Mr Lopez has spent over 30 years working in the US multifamily industry and has previously built and sold 2 businesses in that market.

   • PCI is currently in advanced discussions to integrate with US market leading Internet listing service companies and property revenue management software systems, including Rainmaker LRO, a leading revenue management software provider to the Multifamily housing industry.

   • PCI has US and International Patents pending for its proprietary LiveOffer™ technology.

     
     

   • Revenue for PCI is derived from three channels:

     
     

     • Set up fee per community/leasing company/realtor

       
       

     • Monthly fee per community/leasing company/realtor

     • 1%-3% transaction fee per lease

       
       

   • PCI was a recent winner at the Google NEXT LA Program, AIM (Apartment Internet Marketing) - Multifamily category, Finalist - Harvard Real Estate Venture Competition

     
     

2. Transaction terms

   
   

   The key elements of the Transaction are as follows:

   
   

3. the Company will implement a 18.5111 to 1 consolidation of its existing share capital;

   
   

4. the Company will acquire all of the issued equity securities from PCI security holders. As consideration the Company will:

   
   

5. issue CQA shares, each with an issue price of 0.05 to the value of

   $6,000,000 as initial consideration (Consideration Shares); and

   
   

6. issue CQA shares, each with an issue price of $0.05, up to a maximum amount of $4,000,000 by way of an earn out (Earn Out Shares). The total amount of the Earn Out Consideration will be based on the revenue of the Company during the 2017 calendar year.

   
   

7. CQA will seek to undertake a capital raising of at least $2,500,000 by way of a public offer, at an issue price of $0.05 under a prospectus which will be issued in due course. The funds raised under the prospectus will assist with the expenses of the offer and provide working capital to fund ongoing operations and future growth of the combined CQA/PCI group.

   
   

8. the Company will issue CQA shares to its advisors valued at $500,000 as consideration for advisory services performed.

   
   

9. Rodd Boland and Steven Cole will resign as directors of the Company. Peter Papas will remain as Chairman of the combined group;

   
   

10. Nominees of PCI will be appointed as directors of the Company;

    
    

11. The Company will be required to re-comply with the ASX admission requirements;

    
    

12. Timothy Manson will be appointed as CEO of the Company; and

    
    

13. The name of the Company will be changed to Property Connect Holdings Limited.




14. Conditions

    
    

    The Transaction is conditional upon, amongst other things, the following conditions precedent being satisfied:

    
    

15. there is no material adverse change in the financial condition or operations of PCI, when compared with the financial condition or operations of PCI as at the date of the SPA.

    
    

16. there is no material and adverse change in the financial condition or operations of the CQA, when compared with the financial condition or operations of CQA as a whole as at the date of the SPA.

    
    

17. CQA obtaining all necessary regulatory approvals and satisfying all requirements under the Corporations Act and the ASX Listing Rules (including all appropriate or necessary waivers) for the Transaction;

    
    

18. the Public Offer being completed.

    
    

19. ASX confirms that it is satisfied that CQA has re-complied with chapters 1 and 2 of the ASX Listing Rules and that suspension of trading in shares in CQA will cease with effect from or before Completion.




20. General Meeting

    
    

    A summary of the resolutions to be put to CQA shareholders at the General Meeting is as follows:

    
    

21. approval of a 18.5111-to-1 consolidation of CQA shares on issue;

    
    

22. approval of the Transaction for the purposes of ASX Listing Rule 11.1;

    
    

23. approval of the issue of the Consideration Shares and the Earn Out Shares to the PCI shareholders, at an effective issue price of $0.05 per CQA share;

    
    

24. approval of the issue of at least $2,500,000 worth of CQA shares pursuant to the public offer, each with an issue price of $0.05 per CQA share;

    
    

25. approve the change of name of the Company to 'Property Connect Holdings Limited'; and

    
    

26. approval of the appointment of nominees of PCI as directors of the Company.




The passing of each resolution is effectively conditional on the passing of all other resolutions.




27. Change of activities

    
    

    The Transaction will require the Company to change the nature and scale of its activities in accordance with Listing Rule 11.1, subject to the approval of the Company's shareholders

    
    

    Pursuant to ASX Listing Rule 11.1.3, the Company is now required to re-comply with all of the requirements of Chapters 1 and 2 of the ASX Listing Rules before it proceeds with the proposed change in nature and scale of its activities. This re-compliance will require the Company to lodge a prospectus.

    
    

28. Effect on CQA capital structure

    
    

    The following table shows the indicative impact the Transaction will have on the Company's share capital structure, subject to rounding of fractional entitlements under the proposed CQA share consolidation and assuming the public offer is fully subscribed:

    
    

    Share Capital transaction	Number of Shares	% of total
    Total CQA Shares on issue (pre-consolidation)	740,444,579	-
    Shares on issue post consolidation on a 1:18.5111 basis	40,000,000	12.28 %
    Shares to be issued to Vendors security holders at $0.05 per Share	120,000,000	36.83 %
    Shares to be issued to existing C-note holders of PC including coupon	25,800,000	7.92%
    Shares to be issued to under the public offer at $0.05 per Share	50,000,000	15.35 %
    Maximum number of earn out shares	80,000,000	24.55 %
    Issue of Shares to Advisors	10,000,000	3.07 %
    Total CQA Shares on completion of the PC acquisition, change of activities, and achievement of earnout shares	325,800,000	100%

    
    

    
    

29. Suspension

    
    

    Trading in the Company's quoted securities is currently suspended. As noted above, the acquisition of PCI will involve a significant change in the nature and scale of CQA's activities. Accordingly, it will be necessary for CQA to re-comply with the admission requirements in Chapters 1 and 2 of the ASX Listing Rules in order for the ASX to lift that suspension.

    
    

30. Indicative Timetable (Subject to ASX approval)

    
    

    Action	Proposed Date
    Execution of share purchase agreement	8 October 2015
    Lodge EGM Notice with ASX	21 October 2015
    Dispatch EGM NOM	11 November 2015
    Lodgement of Prospectus with ASIC	11 December 2015
    General Meeting	14 December 2015
    Lodge Listing Application with ASX	18 December 2015
    Closing date of public offer	11 January 2016
    Expected date for re-quotation of the Company's securities	29 January 2016

    
    

    
    

    The above dates are indicative only and may be subject to changed in the discretion of the Directors of CQA without notice.

    
    

31. Additional Information




For additional information about this announcement please contact Peter Papas on 0438 604 776 or peter@bantrygroup.com.au







Peter Papas

Chairman




PROPERTY CONNECT

THE FUTURE OF RENTING IS HERE

Pain Point




Renters Prepared to offer more favorable terms to get the property they want. Property Managers Not optimizing every lease, leaving better terms on the table.




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Market Frustration




'There's a lot of frustration from renters who are losing out on apartments, so they're willing to pay above-ask to make sure their search is over.' - NYC Real Estate News.




'Renters are falling over themselves to give higher offers, out-bid each other, and write heartwarming stories to convince you to accept their offer.' - Zillow




'The open houses were like some twisted beauty contest where you had five minutes to tell your entire life story, woo the landlord, and leave everyone else in the dust.

Emil Meek puts it perfectly: the process 'turns you into a monster.' - KQED News







'30 to 40 other people turning up to view properties for lease only to find out some time later the successful applicant had offered $50 to $100 more a week to secure the home.' - ABC News Australia




3

TM

Introducing LiveOffer




We optimize every lease, maximize property value, whilst providing much needed transparency and visibilty to renters.




Renters Compete




Input Terms Using Sliders




Real-­‐Time Rankings




Proprietary Algorithm




Manager Selects Best Offer




Patent Pending SoluAon







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TM

Why LiveOffer




 Makes rental listings More Competitive

 Property Managers, Agents & Owners get the best result for their properties

 Tenants finally gain much needed transparency and control

to secure the property they want the most

 $500 Billion U.S. Rental Market Undervalues Tenant Demand

 This results in Landlords missing out on unrealized rental income

 Streamlining the application process and Maximizing rental income

 Fastest and most efficient way to get the right tenants and

optimize property value




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