KUALA LUMPUR (Nov 4): Datasonic Group Bhd (KL:DSONIC) is buying a 51% stake in Innov8tif Holdings Sdn Bhd from Revenue Group Bhd (KL:REVENUE) for RM40 million cash.  

Innov8tif, a two-year-old company, specialises in ID verification technology to support e-know-your-customer (e-KYC) and e-know-your-business (e-KYB) and anti-fraud processes, customer onboarding process automation and mobile biometric authentication, said Datasonic in the filing to Bursa Malaysia.

The remaining 49% equity interest in Innov8tif is held by Innov8tif Consortium Sdn Bhd, whose shareholders are Law Tien Soon, Lee Chin Seong, Soh Peng Nam, Law Seeh Key, and ACE Market-listed Securemetric Bhd. Seeh Key is a chief executive officer at Securemetric, a provider of digital security products and solutions

“Innov8tif group’s digital ID technology and solutions will help to complement and enhance the existing businesses of Datasonic and its subsidiaries providing a seamless and secure onboarding procedure through in-demand digital customers onboarding process automation and mobile biometric services,” said Datasonic.

The acquisition comes with a profit guarantee of RM2.5 million for the financial year ending Dec 31, 2025 (FY2025) and RM3 million for FY2026.

Innov8tif posted a profit after tax of RM1.4 million on a revenue of RM14.23 million for the first eight months of this year. Prior to that, the group incurred a loss after tax of RM907,990 on the back of a revenue of RM18.24 million for the financial year ended Dec 31, 2023.

According to filings with the Companies Commission of Malaysia (SSM), Innov8tif as at end-2023 had total liabilities of RM7.72 million, of which RM5.58 million is current liabilities and RM2.13 million is non-current liabilities.  

Meanwhile, its total assets amounted to RM29.03 million, of which RM10.85 million is current assets and RM18.18 million is non-current assets.    

The purchase consideration is expected to be funded via a combination of the group’s existing cash balance, internally-generated funds and/or borrowings, said Datasonic.  

Datasonic has had some boardroom changes followed by change of registrar to Symphony Corp Services Sdn Bhd since late September. 

Two executive directors — Chew Chi Hong who is also a substantial shareholder and Chia Kok Khuang, and assistant company secretary Lee Jin Foong resigned from the company. 

Meanwhile Hajah Erna Ismail was appointed as executive director and Tan Tong Lang was hired as joint company secretary.  

Financial-wise, as at end-June 2024, Datasonic has cash and bank balances of RM50.29 million, bank deposits of RM6.39 million and short term investments of RM49.06 million.

Datasonic’s net profit for its first quarter ended June 30, 2024 (1QFY2025) climbed 42% to RM27.02 million from RM19.04 million a year earlier amid higher earnings from its operations. Quarterly revenue — the bulk of which was derived from the supply of smart cards, passports and personalisation services — increased 7% to RM90.76 million from RM84.82 million.

Datasonic’s share price fell half a sen or 1.3% to 38.5 sen, giving a market capitalisation of RM1.14 billion. Year-to-date, the stock has dropped 9%. 

Revenue Group ended unchanged at 14.5 sen for a market capitalisation of RM88 million. Year-to-date, the stock has fallen 29%.