KUALA LUMPUR (May 6): Information technology (IT) company Cloudpoint Technology Bhd (KL:CLOUDPT) is planning to acquire another IT firm for RM16.8 million as part of its plan to expand product offerings.

The company signed an agreement on Wednesday to buy 100% equity interest in CX One Sdn Bhd, according to a filing with Bursa Malaysia. The vendors are Goh Poh Gan, Kursinah Samat, Chee May Poh and Ng Siao Wei.

"Cloudpoint envisages that the proposed acquisition will enable the group to broaden its capabilities ... into a new product segment encompassing unified communications technology, contact centre solutions and customer engagement platforms," said the filing.

Cloudpoint is involved in the business of enterprise and data centre networking, cybersecurity, digital applications and cloud services, as well as professional IT services. The acquisition is also expected to create cross-selling opportunities across its customer base, the company said.

The acquisition of CX One will come with a profit after tax (PAT) guarantee of RM2.35 million with a retention sum of RM2.65 million for the year ending Dec 31, 2026 (FY2026), and a PAT guarantee of RM2.7 million with a retention sum of RM3 million for FY2028.

The retention sum will work as a performance-linked holdback, where Cloudpoint will only release the amount to the shareholders if CX One achieves the agreed minimum PAT for each respective year. If CX One falls short of the target or records a loss, Cloudpoint will reduce the payout to match the actual PAT or retain the balance entirely.

CX One reported a PAT of RM1.81 million for FY2025 on revenue of RM19.11 million, up from RM877,697 on revenue of RM10.73 million a year earlier, driven by new project wins and an expanded scope of existing contracts.

The firm also holds a majority stake in KBOFM 1Tech Sdn Bhd, which provides specialised telecommunications applications, including satellite tracking, communications telemetry and radar station operations.

Cloudpoint plans to fund RM8.4 million of the acquisition through a reallocation of its initial public offering proceeds. The remaining RM8.4 million, which is the retention sum, will be financed via internally generated funds and bank borrowings.

Shares in Cloudpoint rose two sen or 3.81% to close at 54 sen on Wednesday, giving the company a market capitalisation of RM286.99 million. The stock is down nearly 20% year-to-date.