Grab Holdings Limited (GRAB) has inked a deal to purchase a controlling 60% equity interest in Atome Financial, the digital financial services platform of Advance Intelligence Group Limited ("AIGL"), for $1.49 billion in cash, out of which $0.26 billion is primary growth capital (Phase 1). The Phase 1 deal is being funded entirely from GRAB’s existing cash.
Subject to regulatory approvals and other customary closing conditions, the deal is anticipated to be completed by the third quarter of 2027.
How Will Grab Holdings Benefit?
The deal closure will witness the merger of Atome Financial into GRAB’s Financial Services segment, while the former’s management team will continue to boost its business.
Atome Financial’s consumer lending business, which includes Buy Now, Pay Later (BNPL) loans, consumer cash loans, BNPL cards and digital lending, when combined with Grab’s financial services business, is expected to provide GRAB access to a wider presence in Southeast Asia's consumer credit market.
We would like to remind investors that Atome Financial operates in Singapore, Malaysia, the Philippines, Indonesia and Thailand and serves 25 million cumulative transacted users and currently has a roughly $1 billion gross loan portfolio.
The proposed deal is expected to mutually strengthen both the companies’ credit underwriting capabilities. The merger of Atome Financial’s AI-powered lending infrastructure with Grab’s ecosystem insights is likely to expand GRAB’s credit risk underwriting capabilities. This is expected to enable Grab to broaden product accessibility, while helping to prevent consumer over-indebtedness. The deal offers GRAB the opportunity to scale its lending business faster and more efficiently than building a comparable platform internally.
The buyout is anticipated to be accretive to the combined business adjusted Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) post-completion, and will not affect GRAB’s ongoing share repurchase program. The expanded Financial Services segment is expected to generate $500 million in adjusted EBITDA by 2028. The combined business is expected to have a gross loan portfolio of more than $6 billion by 2028.
Grab also raised its broader 2028 targets following the transaction. The company now expects $1.7 billion in Group Adjusted EBITDA by 2028, up from its previous target, while forecasting revenue growth of more than 30% annually from 2025 through 2028.
Grab's Future Plans to Buy Remaining 40%
Apart from the aforesaid deal, Grab has also entered into an agreement with AIGL and the other sellers to purchase the remaining 40% equity interest in Atome Financial, almost two years after the completion of this aforesaid deal (Phase 2).
The second deal is subject to regulatory approvals and other customary closing conditions and will be priced based on Atome Financial's actual financial performance (between Phase 1 closing and Phase 2 closing). The valuation will use a combination of adjusted EBITDA and revenue multiples, with an equity valuation floor of $2 billion and a cap of $4.5 billion.
GRAB's Zacks Rank and Stocks to Consider
Currently, GRAB carries a Zacks Rank #3 (Hold).
Investors interested in stocks belonging to GRAB’s industry may consider Appian Corporation (APPN) and Astera Labs, Inc. (ALAB).
Appian currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
APPN has an expected earnings growth rate of 73.8% for 2026. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 216.26%.
Astera Labs currently sports a Zacks Rank #1.
ALAB has an expected earnings growth rate of more than 100% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 17.07%.
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This article originally published on Zacks Investment Research (zacks.com).