KUALA LUMPUR (May 24): Kronologi Asia Bhd has proposed to acquire the remaining 83.33% stake in Quantum China Ltd (QCL) it does not own for RM150 million via a combination of cash and new Kronologi Asia shares.

Kronologi Asia has held 16.67% in QCL since 2018. The company provides “Quantum” branded enterprise data management (EDM) infrastructure technology company solutions in China, including data backup, storage and recovery solutions.

Kronologi Asia will pay RM75 million and issue 110.29 million new shares to Singapore-based vendor Lavendar Blooms Investments Ltd at 68 sen per share for the acquisition.

The deal comes with a profit warranty of US$2 million for the financial year ending Jan 31, 2022 (FY22), and another US$2.5 million in FY23.

“Premised on the above, the price-to-earnings (PE) multiples for the proposed acquisition which ranges from 14.49 times and 18.11 times is within the PE multiples of the comparable companies of between 5.6 times and 31.28 times,” it said.

“With the proposed acquisition, the group will be able to further expand its marketing, distribution and customer coverage footprint to an EDM market with growth opportunities that are potentially larger than the market geographies currently served by the group, spurred by the rapid pace of technology advancements and adoption of EDM solutions in China,” the statement said.

On its prospects, QCL said it specialises in high-performance data management which is workflow-driven, enabling it to store, share and preserve enterprise data.

This infrastructure is scalable as bandwidth and capacity can expand to fit the organisation’s growth in future data requirements, QCL said.

The deal is valued at just below 40% to Kronologi Asia’s market valuation of RM389.31 million. Shares of Kronologi Asia rose 2 sen to 62.5 sen today.