Cooper Grace Ward recently acted as legal adviser for ASX listed client Facilitate Digital Holdings Limited (Facilitate) in its scrip acquisition by ASX listed Adslot Limited (ASX:ADJ) by way of members’ scheme of arrangement.

Under the scheme of arrangement, Adslot acquired 100 per cent of the issued shares in Facilitate in exchange for new shares in Adslot.

A members’ scheme of arrangement is an arrangement under the Corporations Act 2001 (Cth) between a company and its members (or any class of them) that can achieve the transfer of the company’s shares to another entity. Members’ schemes of arrangement are regularly adopted to bring about corporate reorganisations, and can be favoured over traditional takeovers in some circumstances. In addition to requiring Court approval, a majority in number of members present and voting at a general meeting and 75% of votes cast must be in favour of the scheme. An attraction to acquirers is that a scheme produces an “all or nothing” outcome and therefore if successful guarantees 100% ownership of the target which is not the case in traditional takeover bids that cannot reach the 90% acceptance level.

Under the Facilitate members' scheme of arrangement, Adslot acquired 100% of the issued shares in Facilitate in exchange for new shares in Adslot. Prior to the acquisition, Facilitate was a leading global provider of digital marketing technology and services to the digital media sector. Adslot is a global provider of online display media trading technology. The combined group will be a leading digital media technology services company that brings together a single media trading platform to service both publishers and media buyers.

The implementation of the scheme was well-timed as recently in the Australian market technology stocks (and particularly digital and mobile media stocks) have been attracting a lot of investor interest, with many trading at record highs. The scheme was announced to the market on 12 September 2013 and was implemented on 23 December 2013. The combined group has a market capitalisation of over $110 million.

The advisory team to Facilitate was led by partner Charles Sweeney, assisted by lawyer Michelle Hyams.