KUALA LUMPUR (Dec 12): Evocom Bhd is preparing to list on the ACE Market of Bursa Malaysia to fund its expansion plans, according to its draft prospectus filed with the exchange.

The initial public offering (IPO) will involve a public issue of 113.91 million new shares, representing 25% of its enlarged share base, at a price yet to be determined. In addition, 22 million existing shares, or 4.83% of the enlarged share base, will be offered for sale.

It plans to use a significant portion of the proceeds to strengthen working capital for its flexible staffing services, which the group said is intended to reduce reliance on external funding such as bank borrowings.

Evocom, which provides flexible staffing and network support services for e-commerce and logistics activities, also plans to develop technology applications that provide real-time visibility for artificial intelligence (AI)-driven workforce planning and management.

It also plans to channel part of the proceeds into expanding its air freight transhipment business and establishing a new warehouse and office in Nilai. The property, already acquired, is three times the size of its current premises in Semenyih.

Founded in 2017 as Evolution Commerce Sdn Bhd by Ian Tan, the group began with parcel shipment services before expanding into last-mile delivery in 2019 through an engagement with SPX Xpress (Malaysia) Sdn Bhd. In 2020, SPX Xpress further engaged the group for flexible staffing services.

For the financial year ended Dec 31, 2024 (FY2024), SPX Xpress is Evocom’s single largest client, accounting for more than 82.37% of its total revenue.

For FY2024, Evocom’s profit after tax rose to RM6.19 million from RM5.31 million in FY2023, though it is lower than RM6.74 million in FY2022. Revenue grew consistently, reaching RM209.41 million in FY2024, from RM200.46 million in FY2023 and RM180.38 million in FY2022.

Flexible staffing contributed 81% of FY2024 revenue, with network support making up the remaining 19%.

Of the public issue, 22.78 million shares (5% of the enlarged share base) will be allocated to the Malaysian public, while 91.13 million shares (20%) will be placed out to selected investors via private placements.

As for the offer for sale, all proceeds will accrue to founder and CEO Tan, whose stake will decline to 63.35% from 90.91%.

NewParadigm Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO.