KUALA LUMPUR (June 20): Loss-making Dataprep Holdings Bhd (KL:DATAPRP) said its proposed acquisition of a 70% stake in a network connectivity services provider, DACS Network Solutions Sdn Bhd, has fallen through.

The IT products and services company had announced the proposed acquistion of the stake from Cloudaron Group Bhd for RM10.5 million last December.

In a bourse filing on Thursday, Dataprep said the two sides have mutually agreed to terminate the share sale agreement after further discussions.

The purchase was to have been undertaken via the issuance of 82.68 million shares in Dataprep at 12.7 sen per share.

At that time, Dataprep said the acquisition would allow the company to expand its business and benefit from synergies. Additionally, Dataprep could leverage DACS Network's extensive telecommunications knowledge and customer base, enhancing cost efficiency through streamlined operations, reduced redundant costs and optimized resource allocation.

Dataprep, which has been in the red for more than 10 years, widened its net loss to RM5.89 million in the first quarter ended March 31, 2024, from RM3.82 million a year earlier, due to expected credit loss on receivables, allowance for obsolete inventories, and depreciation and amortization charges. Revenue dropped to RM6.18 million from RM6.3 million due to new projects secured of lower value.

Shares in Dataprep closed unchanged at 16 sen on Thursday, valuing the company at RM114.69 million.