Efficient E-Solutions to sell two units to Canon Singapore for RM75m

by **Cals** Sun 27 Sep 2015, 17:28

Efficient E-Solutions to sell two units to Canon Singapore for RM75m
By Meena Lakshana / theedgemarkets.com | September 25, 2015 : 11:40 PM MYT

KUALA LUMPUR (Sept 25): Efficient E-Solutions Bhd, an electronic business process outsourcing (BPO) service provider, is disposing of its entire equity stake in two wholly owned subsidiaries to Canon Singapore Pte Ltd for RM75 million, cash, to unlock the value of its investments.
The proposed disposal is expected to result in a one-off gain of RM51.7 million or 7 sen per share, the company said, from which it plans to distribute RM12.1 million as special cash dividend to reward its shareholders, according to its filing on Bursa Malaysia today.
The deal is expected to be completed by the end of this year, after which it intends to distribute the cash dividend to shareholders within three months.
Efficient E-Solutions entered into a conditional share purchase agreement today with Canon Singapore, a wholly owned unit of Canon Inc, for the disposal.
The target companies it is selling are: Mailcom Sdn Bhd, which holds 100% of Printegrate Sdn Bhd, and Efficient Softech Sdn Bhd.
The units are primarily involved in integrated outsourcing solutions in data and document processing, provision of information technology services and business relating to web-finishing products and forms printing.
“As the print statement market continues to consolidate, the proposed disposal provides an opportunity for the company to unlock and realise the value of its investments in the target companies at an attractive offer.
“Additionally, the board also views it as an opportunity to focus its resources into growing its services in development of the document management and other areas of BPO, for example document storage,” it offered as the rationale for its move.
The deal is subject to the relevant regulatory approvals, as well as its shareholders’ greenlight at an extraordinary general meeting to be convened.
RHB Investment Bank Bhd ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 1.40) has been appointed the independent adviser to advise its shareholders on whether the terms of the proposed disposal are fair and reasonable.
Efficient E-Solutions said the disposal price has taken into consideration the enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio (after excluding non-recurring income or events outside the ordinary course and usual course of business) of approximately 8.97 times based on the combined EBITDA of RM8.4 million of the target companies for the financial year ended Dec 31, 2014.
The remainder of the proceeds not distributed will be used for working capital (RM8 million), development of the document management segment/acquisition of new businesses and/or assets within a year and a half (RM53.5 million), and estimated disposal expenses (RM1.4 million).
Efficient E-Solutions’ shares closed 1 sen or 4.44% higher at 23.5 sen today, for a market capitalisation of RM166.65 million.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)