iCreate Limited has reached an agreement for an all-share offer to buy the remaining 49 per cent stake it now doesn’t own in e-commerce entity GetPAID Limited with the offer valued at $55.7 million.

The terms of the deal will see iCreate offering 92,876,667 shares at $0.60 each to shareholders of GetPAID and, if agreed, will see the e-commerce entity becoming a wholly-owned subsidiary. Wilson is also a minority shareholder in GetPAID. iCreate currently owns 51 per cent of GetPAID which it acquired for $25.5 million in 2022 using convertible preference shares issued for five years with an interest rate of 6 per cent.

There is also a proposal for the company’s name to be changed from iCreate Limited to iCreate Group Limited.

“It’s a long time coming. It reflects where we [are] going as a company. We’ve long said we are transforming into a digital creative group of companies and GetPAID forms a critical part of that strategy,” Tyrone Wilson, chairman and CEO of iCreate Limited, told the
Jamaica Observer in an interview earlier this week.

He added that with the acquisition of GetPAID and Visual Vibe, it was only natural to move to a group structure. iCreate started in 2018 with the iCreate Institute. All three entities — iCreate Institute, GetPAID and Visual Vibe — form the iCreate Group. Wilson said another acquisition will be made this year though he didn’t go into details, citing that talks are now at a delicate stage.

However, as it relates to GetPAID, Wilson said the company is already exploring opportunities to deepen its reach into the e-commerce market.

“We are talking to an international payments company right now around a partnership for the business. That partnership is going to give us a lot of opportunities to be a stronger player in the e-commerce space,” he added.

He declined to say who that partner is, adding that more details will be disclosed in a matter of weeks. But, he said the partnership will put GetPAID in a position to offer payment services to micro and small businesses, including operators of barbershops, hairdressers, and craft vendors, and added that the Bank of Jamaica (BOJ) digital currency, and card payments are being considered as avenues to facilitate transactions. He cited Apple Pay — the mobile payment service by Apple Inc that allows users to make payments in person, in iOS apps, and on the web — as an example of how GetPAID’s digital payment system could work.

“The Bank of Jamaica is making it easier for people to open bank accounts targeting the unbanked and underserved, to get them into the formal system. But getting them in the system is one thing. Getting them to stay is another. It is difficult for them to do anything because their options are limited. We intend to tap this underserved market in a big way,” Wilson told BusinessWeek.

He said GetPAID currently has a partnership with First Atlantic Commerce, an online payment gateway and fraud management solutions provider, which helps it “to process payments for businesses and individuals”.

Clearing debt

Still, the proposal to vote on issuing new shares to pay for the additional stake in GetPAID is not the only resolution shareholders are being asked to consider when they meet for the iCreate Limited annual general meeting (AGM) at the AC Hotel Kingston on August 15.

Shareholders are also being asked to consider resolutions for the company to issue an additional 27,255,000 shares valued at $16.4 million to pay fees owing to directors and management in lieu of cash as well as to issue 23,990,714 shares valued at $14.4 million to pay individuals and companies that have provided services to iCreate Limited over the years. Altogether, along with the shares to be issued to acquire the remaining 49 per cent stake in GetPAID, iCreate is asking its shareholders to approve the issuing of an additional 144,092,381 shares. The total value of all the shares to be issued is $86.5 million, at the $0.60 cents per share value they are listed at in the resolutions.

If all the new shares are approved, it would bring iCreate’s issued share count to from 949,685,242 to 1,093,777,623 shares, resulting in a share dilution of 13.17 per cent for existing shareholders.

Wilson acknowledged that this will dilute the holdings of minority shareholders in iCreate, but said it will help to “strengthen the balance sheet and put the business in a position to grow,” which will benefit shareholders in the medium to long term.

He explained how some of the debt was acquired.

“Through the process of acquiring Visual Vibe and transforming the business to where it is now seeing growth in revenues, showing profitability now and so forth, a lot of that came at an expense. It was challenging to raise some of the cash to finalise the Visual Vibe deal, it took us a long time to complete that acquisition and as a result, a lot of professional fees were owed, and on top of that, it took a lot of cash from us also. Some cash that should have been invested in iCreate Institute, the school itself and other operations, we had to make the tough sacrifice to put them towards the Visual Vibe purchase because we knew in the long-run that would be beneficial for us.”

He pointed out that the balance sheet is already showing positive equity, “something we didn’t have before”, as the payables are being reduced.

Together, the payments for fees and services comes to $30.8 million and will reduce iCreate’s trade and other payables by 32 per cent, from its December 2023 level of $97.3 million. It has another $29 million in long-term loans due this year, some of which are associated with the previous cost of acquiring the original 51 per cent stake in GetPAID.

During the first quarter of its current financial year, iCreate Limited also repaid the Sagicor Investments Jamaica bond and converted a short-term debt to non-controlling interests in Visual Vibe. The debt conversion relates to the completion of the sale of 10 per cent interest in Visual Vibe for $57.98 million, and the ordinary shares were issued in the subsidiary, Visual Vibe which was concluded on February 21, 2024. With that, iCreate has now divested a total of 40 per cent of Visual Vibe, reducing its stake to 60 per cent.