Latest news with #Ecomate
New Straits Times
2 days ago
- Business
- New Straits Times
Ecomate acquires majority stake in IT firm for RM8.4mil as part of diversification strategy
KUALA LUMPUR: Home furniture specialist Ecomate Holdings Bhd is acquiring a 60 per cent equity stake in Progressive Computer Systems Sdn Bhd (PCS) for RM8.4 million. This acquisition is part of its strategy to diversify into the information and communications technology (ICT) sector, Ecomate said in a Bursa Malaysia filing today. "The stake will be acquired from Law Seng Peng, a 66-year-old Malaysian who is currently the sole director and shareholder of PCS, with the transaction to be settled fully in cash. "Upon completion of the proposed acquisition, PCS will become a subsidiary company of Ecomate," said the furniture maker. PCS, incorporated in 1990, is involved in the marketing and servicing of computers, peripherals, and software, as well as software development and training services. Ecomate said the proposed acquisition represents an opportunity to venture into the ICT solutions business and diversify its earnings base. The acquisition will be funded entirely through internally generated funds. The group added that Law will remain as a director of PCS post-acquisition and continue to be involved in the company's operations. Regarding the proposed diversification, Ecomate said it is currently involved in the design, production and sale of ready-to-assemble (RTA) furniture, including living room, bedroom and customised pieces. It noted that financial contributions from PCS may account for 25 per cent or more of the group's net profit in the future, which triggered the need for shareholder approval under Bursa Malaysia's listing requirements. An extraordinary general meeting will be convened to seek shareholder approval for both the acquisition and diversification proposals.
The Star
2 days ago
- Business
- The Star
Ecomate acquires 60% stake in ICT business for RM8.4mil
PETALING JAYA: Ecomate Holdings Bhd is venturing into the information and communications technology (ICT) solutions business through the acquisition of a 60% stake in Progressive Computer Systems Sdn Bhd (PCS) for RM8.4mil. In a filing with Bursa Malaysia, Ecomate will buy the stake in PCS from Law Seng Peng, the sole director and shareholder of PCS. Upon completion of the proposed acquisition, PCS will become a subsidiary of Ecomate and Law will remain as a director and shareholder of PCS and 'continue to be involved in the daily operations of PCS.' PCS is principally involved in marketing and servicing of computers, computer-related accessories, and peripherals. It is also engaged in the sale of computer software, software development, programming services, and training on software applications. According to the exchange filing, Law has given a 'unconditionally and irrevocably, guarantees and covenants' that PCS will earn at least RM3mil in audited profit after tax for the financial year ending Feb 28, 2026 (FY26), as well as for each of the following two financial years. 'In the event that PCS shall incur loss after taxation of any amount in any financial year within the profit guarantee period, a payment of RM1.8mil representing 60% of the profit guarantee for each financial year, shall be made in full,' it noted. The purchase consideration of RM8.4mil, which implies a price-to-earnings (PE) multiple of 2.8 times based on the guaranteed profits, is at a 13.6%-19.1% discount to the indicative fair market value of PCS, and deemed the price 'fair'. Ecomate, a ready-to-assemble furniture manufacturer, said the acquisition represents 'a diversification of the existing business operations to include information and communications technology ('ICT') solutions.' Currently, Ecomate is primarily involved in the production of ready-to-assemble (RTA) furniture products including living room and bedroom furniture. With PCS projected to contribute more than 25% of the group's future net profit, Ecomate expects the acquisition to broaden its earnings base. Meanwhile, to reward shareholders, Ecomate also proposed a bonus issue of up to 358.03 million new Ecomate shares on a 1-for-1 basis, and a free warrant issue of the same amount, also on a 1-for-1 basis. Upon completion of both proposals, Ecomate's issued share capital will increase from 358.03 million shares currently to 716.05 million shares, and to 1.07 billion shares assuming full exercise of the warrants. These proceeds raised from the exercise of the warrants will be used for working capital.
