Datasonic to acquire Formosa’s smart card business for RM21.9m

by **Cals** Thu 10 Apr 2014, 13:39

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Thursday, 10 April 2014 10:14

KUALA LUMPUR: Datasonic Group Bhd has proposed to acquire a 99.45% stake in Asia Pacific Card and System Sdn Bhd (APCS) together with the latter’s subsidiary, Constant Ahead Sdn Bhd (CASB), from Formosa Prosonic Industries Bhd (FPI) for a total cash consideration of RM21.9 million.

In a press statement yesterday, Datasonic said it had entered into a share sale agreement with FPI for the acquisition, and expected the deal to be concluded by the third quarter of this year. APCS manufactures electrical integrated circuit (IC) cards, or commonly known as smartcards, and its related products.

Datasonic told Bursa Malaysia that the purchase consideration was arrived at on a “willing buyer, willing seller” basis after taking into account the earning potential of APCS. “The purchase consideration represents 1.22 times the audited net tangible assets of APCS Group as at Dec 31, 2013 of RM18 million.”

“This proposed acquisition is in line with the group’s long-term strategy to safeguard one of the group’s sources of supplies and increase its competitive edge within its industry. Through this acquisition, the group will be in a better position to protect its technological expertise, supply chain and processes in the smartcard business,” said Datasonic.

Datasonic was slapped with an unusual market activity (UMA) query by Bursa on Feb 18 when its counter rallied to an all-time high of RM3.44, since its listing in August 2012.

The stock climbed to RM4.85 on April 1 before retreating to close at RM3.91 yesterday.

Analysts believed the stock’s rally was due to anticipation that Datasonic would gain from the government’s move to make the migration to the new national identity card compulsory.

This article first appeared in The Edge Financial Daily, on April 10, 2014.