MyEG Services Bhd is looking to acquire a 10% stake in S5 Holdings Inc, a holding company for S5 Systems Sdn Bhd, one of the frontrunners for the National Integrated Immigration System (IIS) contract worth RM1.5 bil.
In a Bursa filing dated June 10, MyEG announced that it has, through its wholly-owned subsidiary MyEG Capital Sdn Bhd, entered a share sale agreement with Merrington Assets Ltd for the 10% stake in S5 Holdings, with a total purchase consideration of RM90 mil, to be fulfilled by RM75 mil in internally generated funds and RM15 mil in MyEG shares.
The shares will require the approval of Bursa for listing and quotation, and will represent 0.36% of the existing total issued and paid-up capital of MyEG. The acquisition is expected to be completed by the third quarter of 2020.
MyEG noted that the basis of the acquisition considered the S5 group’s “track record and position as the market leader in the provision of national security solutions, the potential synergistic benefits arising from the acquisition, and the future growth prospects of the S5 group and the favourable outlook of the digitalisation of government services.”
MyEG believes that “the S5 group’s solutions and systems are complementary to the company’s existing and prospective service offerings, especially within the immigration space in Malaysia.”
“Furthermore, going forward, the S5 group will have the opportunity to leverage the company’s established track record, experience and capabilities as the flagship e-government service provider in Malaysia with a growing presence in the region to enhance its performance and generate synergies for the mutual benefit of all stakeholders,” said MyEG in the filing, also noting that it is positive on its long-term business and growth prospects.
Merrington is a company incorporated in the British Virgin Islands, and had a 20% stake in S5 Holdings, along with Avocat Sdn Bhd which owns a 3.6% stake, and primary shareholder NSA Technology Sdn Bhd, which is the primary shareholder with 76.4%.
It should be noted that the directors of S5 Holdings includes Syed Mohammad Hafiz Syed Razlan, who is also the sole director of NSA Technology Sdn Bhd. He is also the nephew of Raja Perlis Tuanku Syed Sirajuddin Putra Jamalullail, as well as the son of former Arau MP Syed Razlan Syed Putra Jamalullail, who joined Bersatu from Umno on July 15, 2018.
At 11.16am, MyEG’s shares were last done at RM1.45, up 8 sen, with 82.8 million shares changing hands. – June 11, 2020
