CEO Morning Brief

Systech Gets Shareholders’ Nod for Acquisition, Bonus Shares Issue

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Publish date: Fri, 19 Apr 2024, 09:46 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (April 18): IT services firm Systech Bhd said on Thursday that shareholders have approved several proposals, including an acquisition and bonus shares issue.

Shareholders have endorsed the acquisition of Wilstech Sdn Bhd for RM20 million in cash and RM55 million in shares at 36 sen apiece, the company said in a statement. The company has also secured approval for a one-for-four bonus warrants issue, Systech said.

The proposed acquisition “creates synergies with our existing offerings,” said executive director Teoh Keng Chang. “With Wilstech, a one-stop B2B IT specialist, on board, we can expand and diversify our customer base while streamlining resources and unlocking new business opportunities,” he added.

The acquisition of Wilstech also comes with a profit guarantee by the seller of an audited profit after tax of at least RM5.0 million for a year, he noted.

Systech also secured approval to issue up to 144.0 million new shares and to set up an employees’ share scheme of up to 15% of the total number of issued shares.

The proposals are expected to be completed by the first half of 2024, the company said.

“Following shareholders’ approval on the proposals, we will have stronger resources to deliver the contracts on hand for the provision of artificial intelligence and Internet of Things solutions under our corporate solution business segment,” Teoh added.

Shares in Systech were unchanged at 49.5 sen at the time of writing on Thursday, valuing the company at RM1.18 billion.

Source: TheEdge - 19 Apr 2024

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