KUALA LUMPUR (Sept 9): Radiant Globaltech Bhd (KL:RGTECH) is acquiring an 80% equity interest in Rymnet Solutions Sdn Bhd for RM52.5 million, as it seeks to widen and diversify its information technology (IT) solutions offerings.

In a filing to the bourse on Monday, RGTech said the proposed acquisition of the stake from Un Sze Hau will enable the company to incorporate human resources (HR) management system modules into its existing suite of solutions, thereby offering a more comprehensive and integrated service to its customers.

“This … not only improves the value proposition for potential customers but also generates significant cross-selling opportunities with existing customers,” said RGTech.

The company said Rymnet is an IT solutions provider with a focus on HR management operations, including payroll, time attendance, and e-learning software modules.

It added that the acquisition will also strengthen its geographical market reach, in particular, its market presence in Singapore.

The purchase consideration of RM52.5 million was arrived at on a “willing-buyer willing-seller” basis, said RGTech. At the price, Rymnet is valued at 12.59 times its latest audited profit after tax of approximately RM4.17 million for the financial year ended Dec 31, 2023.

“The board is of the view that the purchase consideration, which represents a PE (price-earnings) multiple of 12.59 times, is justifiable and attractive to RGTech Group given that the said PE multiple is below the average trading PE multiple of the comparable companies,” said RGTech.

Rymnet also comes with an accumulated profit guarantee of RM11 million.

RGTech said it will pay RM42.5 million of the purchase consideration in cash and the balance RM10 million via the issuance of 30.3 million shares to Un at 33 sen per share.

The acquisition is conditional upon the completion of the acquisition of the entire equity interest in Rymnet Solutions Pte Ltd by Rymnet, which would result in Rymnet Solutions being a wholly owned subsidiary of Rymnet.

This pre-acquisition restructuring aims to strategically align Rymnet’s corporate structure and ownership, the company said.

RGTech is involved in offering proprietary retail management solutions and mobile applications which include retail and food and beverage management software, warehouse management system, proof of delivery, payment gateway, and integrated maintenance system.

Its shares closed at 35 sen on Monday, valuing the company at RM183.82 million.