Hitachi Sunway allots up to RM100m for M&A

PETALING JAYA: Information technology (IT) services and solutions provider Hitachi Sunway Information Systems Sdn Bhd has allocated RM50 million to RM100 million as seed fund for merger and acquisition activities in the next 12 months, said its group CEO and director Cheah Kok Hoong.
"We're looking at acquiring a variety of companies that can complement our business, it could be (companies related to) infrastructure and managed services (IMS) and end-to-end security solutions," he told reporters at a press conference here yesterday.
Cheah said the funds include the acquisition of the entire business of Free Net Business Solutions Sdn Bhd (Freenet) that provides data centre managed services, as well as a 30% stake in Powerware Systems Sdn Bhd (PWS), which focuses on data centre consultancy, design and construction at an undisclosed price.
Cheah said the acquisitions will help the company in its aspirations to be the next powerhouse player in the region's data centre sector, leveraging on the strong demand for regional data centre services, as cloud computing sees continued growth throughout Southeast Asia's ICT markets.
The move is to strengthen Hitachi Sunway's data centre services business, which is under the IMS division, as a means to expand its IT services business.
"When we reach our revenue target of RM240 million in FY15, 60% to 65% of it will be coming from IMS (from 55% currently)," Cheah said.
The company is looking at achieving revenue of RM128 million in FY14, from RM91 million in FY13 and RM60 million in FY12.
Currently, IMS makes up the bulk of Hitachi Sunway's revenue (55%), followed by engineering solutions (30%) and applications (15%).
With the acquisition of Freenet, Hitachi Sunway gains two additional ISO-certified Tier III compliant data centres within the country located at Cyberjaya and Kuala Lumpur.
Its third data centre at The Pinnacle Sunway is currently under construction and Hitachi Sunway is in the midst of completing the building of its newest data centre by October 2014. The data centre is being designed and constructed by PWS and will be operated by Hitachi Sunway.
Established in April 2013, Hitachi Sunway is a joint venture company of Hitachi Systems, Ltd and Sunway Technology to provide IT services in Malaysia and Southeast Asia.
Headquartered in Malaysia, it also has offices in Singapore, Thailand, Indonesia, Philippines and Vietnam. The company consists of 170 professionals serving over 800 customers in Malaysia and Southeast Asia.