KUALA LUMPUR (June 4): Ramssol Group Bhd’s (KL:RAMSSOL) latest deal to acquire two manpower-and-recruitment firms would be earnings accretive, said analysts.
The proposed acquisition of 60% in INNIO Holding Sdn Bhd and 49% in Agensi Pekerjaan INNIO, backed by two-year profit guarantee, is also done at an attractive price that values the combined deal at about six times the forward earnings, according to Maybank Investment Bank and Apex Securities.
“We expect these acquisitions to be value-accretive, with commercial synergies apparent,” Maybank Investment noted.
Shares of Ramssol rose as much as 1.5 sen or over 2% on Thursday before ending the day down about 1% at 68.5 sen on Thursday. The company has market capitalisation of RM277 million based on its closing price.
Ramssol has yet to recover from a sharp decline since the end of February when the Iran war broke out and is still down nearly 29% on a year-to-date basis. The latest acquisitions come at a time of strong earnings growth for Ramssol.
If the deal goes through, Ramssol would gain control of INNIO Group, which provides hostel management and foreign worker recruitment, as well as CariJob that operates a Southeast Asia manpower platform, while the stake in Agensi Pekerjaan INNIO gives it an employment agency.
If completed by the third quarter, Ramssol would turn into an integrated workforce services firm, said Apex Securities.
“We see immediate cross-sell potential in both directions,” the research house said.
INNIO’s outsourced workforce becomes a captive distribution channel for Ramssol’s earned wage access PaydayNow and upskilling-and-compliance EnGo, while Ramssol’s existing clients provide an outbound channel for INNIO’s recruitment and manpower outsourcing services, the house noted.
Maybank Investment and Apex Securities, the only two research houses covering Ramssol, both maintained their “buy” calls on the stock.