TROOPS, Inc. (Nasdaq: TROO) Explores Acquisition of Hong Kong Insurance Brokerage and Nears Agreement to Acquire Bestfaith International Technology Limited

Rhea-AI Summary

TROOPS (NASDAQ: TROO) has announced two strategic initiatives to expand its presence in Hong Kong. The company is conducting preliminary due diligence on a Hong Kong-based insurance brokerage and is in advanced negotiations to acquire Bestfaith International Technology .

The potential insurance brokerage acquisition, still in early stages, would enhance TROOPS' financial services portfolio in Asia's insurance market. The deal remains subject to due diligence, regulatory approvals, and final negotiations.

The more advanced acquisition of Bestfaith would give TROOPS 100% ownership of a building management firm that provides telecommunication management and optical fiber services to over 200 residential and commercial properties in Hong Kong. This acquisition awaits regulatory approvals and final board consent.

Positive

• Strategic expansion into Hong Kong's property management sector with access to 200+ buildings
• Potential diversification into insurance services through brokerage acquisition
• Cross-selling opportunities between property management and insurance services

Negative

• Both acquisitions subject to regulatory approvals and final negotiations
• No binding agreement reached for insurance brokerage acquisition
• Execution risks in integrating multiple acquisitions simultaneously

Insights

Financial Analyst

TROOPS' dual acquisition strategy represents a targeted expansion approach that could significantly alter its business composition given the company's relatively small $86.6 million market capitalization. The proposed Bestfaith acquisition appears most advanced and strategically sound, potentially delivering immediate scale by adding 200+ properties to TROOPS' management portfolio. This would establish a recurring revenue foundation in Hong Kong's property sector – particularly valuable given the forward-looking statements referencing transition to a "light-asset" model.

The insurance brokerage exploration, while still preliminary, indicates a complementary diversification strategy that could create natural cross-selling opportunities between property management clients and insurance products. This vertical integration approach is particularly effective in densely populated markets like Hong Kong where client acquisition costs are high.

Investors should note several key considerations: 1) No financial terms are disclosed for either transaction, raising questions about funding mechanisms and potential dilution; 2) Regulatory approval remains pending for both deals; and 3) Integration execution will be critical, especially for Bestfaith where operational continuity across 200+ properties must be maintained during ownership transition.

The strategic rationale aligns with creating a more diversified service offering in Hong Kong, potentially transforming TROOPS from a small-cap player into a more established market presence with enhanced revenue stability through property management contracts.

Real Estate Expert

The Bestfaith acquisition represents a significant market entry strategy into Hong Kong's competitive property management sector. Managing telecommunications and optical fiber services across 200+ properties gives TROOPS immediate scale advantages that would be difficult and time-consuming to build organically. This portfolio likely includes both premium and mid-market properties, providing diverse revenue streams across Hong Kong's property segments.

Hong Kong's property management market is characterized by long-term contracts and high switching costs, meaning that well-managed acquisitions typically retain client relationships through ownership transitions. Bestfaith's specialization in telecommunication management and fiber services is particularly valuable as these represent essential building infrastructure that generates stable, recession-resistant income.

The acquisition's strategic value extends beyond current management contracts. TROOPS gains: 1) Established relationships with property owners and developers; 2) Operational expertise in Hong Kong's unique regulatory environment; and 3) A platform to upsell additional services including potential insurance products from their other acquisition target.

Building management firms in Hong Kong typically operate on 5-15% profit margins with contracts averaging 2-3 years, providing predictable cash flows. If executed properly, this acquisition establishes TROOPS as a legitimate player in Hong Kong's property services sector with built-in growth opportunities through service expansion to the existing client base.

Strategic Moves to Expand Footprint in Hong Kong's Real Estate and Insurance Sectors

HONG KONG, March 24, 2025 /PRNewswire/ -- TROOPS, Inc. (Nasdaq: TROO) (the "Company" or "TROOPS") today announced two strategic initiatives to accelerate its growth in Asia. The Company has commenced preliminary due diligence on a prominent Hong Kong-based insurance brokerage as a potential acquisition target and is in advanced negotiations to acquire Bestfaith International Technology Limited ("Bestfaith"), a leading building management company servicing over 200 buildings across Hong Kong.

Preliminary Due Diligence on Insurance Brokerage

TROOPS is conducting preliminary due diligence on an insurance brokerage headquartered in Hong Kong. While discussions are in early stages, this acquisition would complement TROOPS' existing financial services portfolio and enhance its capabilities in Asia's dynamic insurance market. The Company emphasizes that no binding agreement has been reached, and the transaction remains subject to due diligence, regulatory approvals, and final negotiations.

Proposed Acquisition of Bestfaith International Technology Limited

Concurrently, TROOPS is finalizing an agreement to acquire 100% of Bestfaith International Technology Limited, a Hong Kong building management firm which is responsible for telecommunication management and optical fibre related services for over 200 residential and commercial properties. Bestfaith's extensive network and expertise in facility operations, maintenance, and tenant services align with TROOPS' mission to deliver integrated property management solutions. The acquisition is expected to close following customary closing conditions, including regulatory approvals and final board consent.

Strategic Rationale

These initiatives underscore TROOPS' commitment to expanding its presence in Hong Kong's growth sectors. The addition of Bestfaith would establish TROOPS as a key player in the region's property management industry, while the potential insurance brokerage acquisition would enhance its revenue streams and create cross-selling opportunities between its property management and insurance services divisions.

Safe Harbor and Informational Statement

This announcement contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein and those preceded by or that include the words "believe," "expect," "anticipate," "future," "will," "intend," "plan," "estimate" or similar expressions, are "forward-looking statements". Forward-looking statements in this release include, without limitation, the effectiveness of the Company's multiple-brand, multiple channel strategy and the transitioning of its product development and sales focus and to a "light-asset" model, Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. These forward-looking statements can change as a result of many possible events or factors not all of which are known to the Company, which may include, without limitation, our ability to have effective internal control over financial reporting; our success in designing and distributing products under brands licensed from others; management of sales trend and client mix; possibility of securing loans and other financing without efficient fixed assets as collaterals; changes in government policy in China; China's overall economic conditions and local market economic conditions; our ability to expand through strategic acquisitions and establishment of new locations; compliance with government regulations; legislation or regulatory environments; geopolitical events, and other events and/or risks outlined in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About TROOPS, Inc.

TROOPS, Inc. is a conglomerate group of various businesses with its headquarters based in Hong Kong. The group is principally engaged in (a) money lending business in Hong Kong providing mortgage loans to high quality target borrowers (b) property investment to generate rental income and (c) the development, operation and management of an online financial marketplace that provides one-stop financial technology solutions including API services by leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). The group's vision is to operate as a conglomerate to build synergy within its own sustainable ecosystem thereby creating value to its shareholders.

For more information about TROOPS, Inc., please visit our investor relations website: www.troops.co 

View original content:https://www.prnewswire.com/news-releases/troops-inc-nasdaq-troo-explores-acquisition-of-hong-kong-insurance-brokerage-and-nears-agreement-to-acquire-bestfaith-international-technology-limited-302409161.html

SOURCE TROOPS

FAQ

What are the key acquisitions TROOPS (TROO) is pursuing in Hong Kong?

TROOPS is pursuing two acquisitions: Bestfaith International Technology , a building management company serving 200+ properties, and a Hong Kong-based insurance brokerage (currently in due diligence phase).

How many properties does Bestfaith International Technology manage in Hong Kong?

Bestfaith International Technology manages over 200 residential and commercial properties in Hong Kong.

What services does Bestfaith provide to TROO's potential property portfolio?

Bestfaith provides telecommunication management and optical fiber related services, along with facility operations and maintenance for residential and commercial properties.

What is the status of TROOPS' (TROO) insurance brokerage acquisition in Hong Kong?

The insurance brokerage acquisition is in preliminary due diligence phase, with no binding agreement reached and subject to regulatory approvals and final negotiations.

What percentage of Bestfaith International Technology is TROOPS (TROO) planning to acquire?

TROOPS is planning to acquire 100% of Bestfaith International Technology