KUALA LUMPUR (Dec 19): Dataprep Holdings Bhd (DHB)has proposed to acquire a 70% stake in DACS Network Solutions Sdn Bhd (DNS) for a total purchase consideration of RM10.5 million.

The group told Bursa Malaysia on Tuesday that its unit, Solisnet Sdn Bhd (SSN) has acquired the stake in DNS from Cloudaron Group Bhd.

It added that the purchase consideration will be satisfied via issuance of 82.68 million shares in the group, at an issuance price of 12.7 sen per share.
 
“The proposed acquisition provides the group with an opportunity to expand its business offerings, whilst simultaneously enabling DHB to derive synergistic benefits through the acquisition of the 70% equity interest in DNS.
 
“Upon completion of the proposed acquisition, given the similarity in business nature, DHB may leverage on DNS’ extensive knowledge in the telecommunication industry and capitalize on DNS’ existing customer base.

“The proposed acquisition may help DHB to enhance its cost efficiency through synergies and economies of scale. The proposed acquisition allows for the streamlining of operations, reduction of redundant costs and optimised resource allocations,” it said.

According to the group, DNS is principally involved in the provision and management of network connectivity services, operating as a telecommunications industry dealer.

Separately, the group proposed a private placement of up to 316.27 million new DHB Shares, representing 30% of the enlarged total number of issued DHB Shares based on the number of issued DHB Shares of 737.97 million as at Dec 15.

Based on the illustrative issuance price of 12.7 sen, the proposed private placement is expected to raise RM40.17 million.

The group intends to use most of the proceeds to finance its working capital and repay its bank borrowings.

Shares in Dataprep closed unchanged at 14 sen, giving it a market capitalization of RM110.83 million.

Year to date, the stock has fallen by 37%.