‘Netflix of Indonesia’ In Talks to Merge with Malacca SPAC

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PT MNC Vision Networks Tbk is in talks to merge Vision+, its streaming television business known to consumers as the “Netflix of Indonesia,” with blank-check company Malacca Straits Acquisition Co., according to people with knowledge of the matter.

In addition to Vision+, known as an over-the-top or OTT media service, MNC Play, an Indonesian broadband and TV box provider that’s also part of MNC Vision Networks, is set to be included in the transaction, said some of the people, who asked not to be identified because the matter is private. MNC, controlled by Indonesian tycoon Hary Tanoesoedibjo, is poised to roll its equity into the transaction, making it the largest shareholder of the combined entity, they said.

Malacca Straits has begun discussions with investors including Ray Zage’s Tiga Investments as it seeks to raise $50 million or more in new equity to support a transaction that’s set to give the combined company an enterprise value of around $600 million, said some of the people. A transaction could be announced as soon as next month, but as with any deal that hasn’t been finalized, it’s possible terms can change or talks fall apart.

Representatives for MNC, Malacca Straits and Tiga declined to comment.

Vision+, which launched in 2019, has 1.6 million paid subscribers and over 32 million monthly active users, while MNC Play has about 300,000 subscribers, according to a MNC filing posted this month.

The businesses posted collective earnings before interest, taxes, depreciation and amortization, or Ebitda, and revenue of about $46 million and $77 million respectively in 2020, the people said. The figures are projected to grow at compound annual rates of 39% and 45% through 2025 to $293 million and $400 million based on an expected paid subscriber base of about 6.6 million, they said.

The subscription video on demand penetration to total population in Indonesia was among the lowest in the Asia Pacific region at 2% in 2020, per the MNC filing. The company said that’s expected to rise from 5.1 million subscribers in 2020 to 21.6 million in 2025, for a compound annual growth rate of 33%.

The Malacca Straits SPAC, led by CEO Kenneth Ng, counts pan-Asia special situations investor Argyle Street Management Ltd. as its co-sponsor. It raised $144 million in a July initial public offering and said it’d focus its search for a target in Southeast Asia.

©2021 Bloomberg L.P.

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