KUALA LUMPUR, Kronologi Asia Bhd has announced plans to acquire Quantum Storage (Hong Kong) Ltd for RM45 million, strengthening its presence in the enterprise data management (EDM) market, particularly in Hong Kong and Taiwan.
According to its Bursa Malaysia filing, the deal will be settled through the issuance of up to 40.8 million new shares at 98 sen each, along with a cash payment of up to RM5 million.
Kronologi said the purchase price was arrived at on a willing buyer-willing seller basis after arm’s-length negotiations, with payments to be made in stages. The valuation represents a price-earnings multiple of 8.85 times, based on a profit warranty of US$1.2 million (RM5.07 million) for the financial year ending Dec 31, 2017 (FY17).
The profit warranty was deemed reasonable, supported by Quantum Storage (HK)’s unaudited net profit of US$580,000 for the first half of FY17 and the company’s future growth prospects within the enlarged Kronologi group.
Following the acquisition, Law Chee Yii, who owns 100% equity in Quantum Storage (HK) and was previously a non-substantial shareholder of Kronologi, will emerge with a 12.1% stake in the group.
The RM5 million cash portion of the deal will be funded through proceeds raised from Kronologi’s private placement of new shares completed on Aug 25.
Kronologi currently operates in Southeast Asia and India. The inclusion of Quantum Storage (HK) will extend its footprint to Hong Kong, Taiwan, and Greater China, regions seen as offering strong growth opportunities amid rising digitalisation and technology adoption.
On Monday, Kronologi’s share price slipped 1.02% to 97 sen, valuing the company at RM288.5 million. Year-to-date, the stock has surged 212.9%, and at current levels, it trades at a price-earnings ratio of 23.8 times.
