Multiactive aims to crack Asian market
Rating agencies praise Bank of Nova Scotia
Drew Hasselback
Financial Post
VANCOUVER - Multiactive Software Inc. is proud of its business connections in Asia.
The e-commerce software company is chaired by Terence Hui, chief executive of Concord Pacific Group Inc., the real estate company that is building condos on the site of Expo '86 and developing CityPlace on the former railway lands in downtown Toronto.
Mr. Hui has strong connections in the Hong Kong business community. Some of those relationships have already resulted in significant deals. On Feb. 1, Vancouver-based Multiactive Software announced that its Asian subsidiary, Multiactive Pacific, is buying a 70% controlling interest in privately held ABC Data & Telecom Ltd. of Hong Kong for $10.7-million.
Anthony Au, president of the Hong Kong Information Technology Federation and a founder and director of ABC, retains the other 30% of ABC.
Then there's the agreement announced on March 20 between Multiactive and Compaq Computers Inc. in Hong Kong. Under that deal, Multiactive's ecBuilder e-commerce software will be bundled with Compaq personal computers marketed to small and medium-sized businesses in Hong Kong.
"It is part of our overall strategy to rapidly penetrate different markets in Asia with our small business products initially. This arrangement with Compaq is our first step in seeding the Hong Kong market," Mr. Hui said when the deal was announced.
The market sure liked the news. On the day of the announcement, Multiactive (E/TSE) rose $1.45 or 23% to close at $7.80. The stock has since fallen off a bit since. The shares closed yesterday at $6.65, down 5½.
Despite the decline, the shares are trading at roughly double the value they were at the beginning of the year. The stock trades in a 52-week range of $8.50 to 24½.
Multiactive shares starting picking up momentum last fall after the company received rave reviews at trade shows. In particular, Multiactive's Entice! e-commerce software was named "best enterprise productivity software" at the Comdex convention in Las Vegas in November.
Multiactive at present sells version 1.6 of Entice!, and aims to release version 2.0 this year. The company recently raised $10-million through a warrant financing. Some of the proceeds will be used to develop Entice!
Sales have also picked up and the company has managed to narrow its loss from the previous fiscal year.
For the 12 months ended Nov. 30, 1999, the company reported a net loss of $3.6-million (6½ a share) on revenue of $23.2-million, an improvement on a net loss of $6.5-million (51½) on sales of $16.6-million a year earlier.
Samuel Lee, who follows Multiactive for Taurus Capital Markets Ltd., raised his 12-month target price on the stock to $12 from $7.50 after the announcement of the Compaq deal.
In a comment published on March 23, Mr. Lee said the Compaq deal is Multiactive's first step toward attempting to crack the Asian market through its new relationship with ABC.
"We believe Multiactive is well positioned to penetrate this expanding market through further acquisitions and strategic alliances with key regional partners," he said.
Brent Halverson, Multiactive's president and chief operating officer, said the company hopes to build on its relationships in Asia, and is working on "localizing" the software through the creation of a Chinese-language edition.
The company is poised to launch a wireless application that will allow software users to access their databases using handheld devices. The company is also working on projects that will allow the users to "lease" the Multiactive software application from other Internet sites.
"We've always believed that adding the wireless component to the Entice! product will really create the killer ap," Mr. Halverson said. "It's going to be a very interesting year."
MULTIACTIVE SOFTWARE INC.:
Chairman: Terence Hui Ticker: E
Listed: Toronto Stock Exchange
Head office: 1090 West Pender Street, 9th floor
Vancouver, British Columbia
V6E 2N7 Telephone: (604) 601-8000 |
