PETALING JAYA: Retail technology solutions provider Radiant Globaltech Bhd is proposing to acquire an 80% stake in Grand-Flo Spritvest Sdn Bhd (GF Spritvest) for RM11.6 million cash to expand its domestic customer coverage and increase its suite of software and other services.
The remaining 20% will be held by Jejaka 7 Capital Sdn Bhd, in which GF Spritvest’s director and CEO Cheng Ping Liong holds majority stake of 55%.
GF Spritvest, a 100%-owned subsidiary of Grand-Flo Bhd, provides electronic data capture and collation (EDCC) solutions that enable businesses to manage and collate data with barcode and radio-frequency identification technology.
GF Spritvest’s EDCC solutions include assets tracking, sales force automation, warehouse and inventory control software and barcode devices. GF Spritvest’s comprehensive solutions include the supply, installation, and integration of EDCC hardware and devices, distribution and integration of both proprietary and third-party software, as well as technical support and maintenance services.
At the same time, GF Spritvest entered into a service agreement with Cheng to continue serving as its director and CEO. Further, Cheng will provide a cumulative net profit guarantee of RM3.2 million from the completion date of the SSA until the financial year ending Dec 31, 2022.
Radiant Globaltech managing director Paul Yap Ban Foo said: “The acquisition dovetails with our strategy of strengthening our industrial customer base to complement our current stronghold amongst retail players. Besides the wider coverage in customer sectors, Radiant Group benefits not only by immediately expanding our suite of products and services, but also in combining resources for further development of technological solutions to digitalise operations for customers.
“This strengthens our overall competitiveness in the market and positions us as a full-service solution provider for corporations of various sectors. This is an opportune acquisition for Radiant Group to sustain our long-term growth and support the nation’s increasingly digital economy.”
The purchase consideration is at a price-earnings multiple of 8.95 times, based on GF Spritvest’s latest audited net profit of RM1.62 million in the financial year ended Dec 31, 2019.
Simultaneously, Radiant Group proposed a variation of the use of proceeds raised from its initial public offering (IPO) to partially finance the purchase of consideration of RM11.6 million, where RM11.5 million would be satisfied through IPO proceeds and the balance RM100,000 via internally generated cash.
The proposed acquisition and variation are subject to shareholders’ approval at an EGM to be convened. The acquisition is targeted to be completed by the fourth quarter of 2020.