(From left) TechStore Bhd chief technology officer Peter Obsel, TechStore executive director Mohd Fadzil Mohd Daud, TechStore managing director Tan Hock Lim, TechStore independent non-executive chairman Datuk Ab Rahim Abu Bakar, M&A Equity Holdings Bhd managing director Datuk Bill Tan, M&A Securities Sdn Bhd head of corporate finance Gary Ting, and TechStore chief information officer Juraj Zidzik at the IPO prospectus launch on Wednesday. (Photo by Low Yen Yeing/The Edge)
KUALA LUMPUR (Jan 22): TechStore Bhd, which provides hardware and software to businesses, has fixed its initial public offering (IPO) price at 20 sen per share ahead of its listing on the ACE Market of Bursa Malaysia.
The proposed IPO, which would gross up to RM30 million, involves a sale of 125 million new shares and 25 million existing shares, according to the company’s prospectus released on Wednesday. Collectively, the listing will offer investors a 30% stake in the company.
Applications for the IPO will close on Feb 4, with the company slated to list on the ACE Market on Feb 18.
“The IPO will serve as a catalyst to strengthen our market presence and drive future expansion,” TechStore managing director Tan Hock Lim said during the prospectus launch.
The company’s involvement in two of the three light rail transit projects in Klang Valley and having contributed to the first mass rapid transit line, as well as its participation in the Singapore-Malaysia Rapid Transit System link, “paved the way for future project opportunities,” he said.
TechStore mainly provides IT security and automation solutions, including command and control systems, surveillance systems such as closed-circuit televisions and fire alarms, as well as electronic payment and operating systems.
It has 11 ongoing projects with unbilled jobs on hand worth RM104.6 million as of Dec 21, 2024. Tender book stood at RM647.2 million.
The public issue is expected to raise gross proceeds of RM25 million, out of which RM11.5 million has been allocated for working capital. Meanwhile, RM5 million will go towards partially repaying bank borrowings totalling RM33.4 million.
The remainder is earmarked for recruiting business development personnel, capital expenditure, and defraying listing expenses.
Under the IPO’s public issue, TechStore will offer 25 million new shares to the Malaysian public, and another 25 million shares to eligible individuals. The company will also allocate 62.5 million new shares to Bumiputera investors, and 12.5 million shares to selected investors.
Proceeds from the offer-for-sale via private placement amounting to RM5 million will accrue entirely to the sole selling shareholder and executive director Mohd Fadzil Mohd Daud.
Tan is presently TechStore’s largest shareholder, holding a 78.7% equity interest, while Mohd Fadzil holds the remaining 21.3%. Post-IPO, Tan’s stake will be diluted to 59%, while Mohd Fadzil’s shareholding will shrink to 11%.
At an IPO price of 20 sen per share, TechStore will have a market capitalisation of RM100 million. Upon listing, the company will be valued at 12 times its earnings for the financial year ended Dec 31, 2023. TechStore reported a profit after tax of RM7.7 million, on revenue of RM62.2 million for 2023.
M&A Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO.