Systech in deal to buy 51% of Singapore-based Postlink

PETALING JAYA: Systech Bhd yesterday entered into a share sale agreement for the acquisition of a 51% stake in Postlink Pte Ltd, a Singapore-based company specialising in the business of annual report (AR) mailing and posting and most recently, digitisation, for RM9.80 million.
Systech will pay RM1.6 million cash and issue new shares at 27 sen apiece, to pay for the stake.
“The Systech Group, primarily being involved in software development intends to leverage on Postlink’s expertise and experience in the AR mailing and posting to co-develop the digitised AR platform and expand its product offering in the near future,” Systech said in a stock exchange filing.
Ir said the proposed acquisition is in line with its overall strategy of focusing on research and development to enhance and to expand the breadth of its solutions offerings, and expanding its market reach by diversifying its customer base geographically.
Postlink has been profitable over the past three financial years and has a strong foothold in the AR mailing and posting business in Singapore, which has one of the largest stock exchanges in the region, with a total of 754 listed securities as at the end of February 2017 and a market capitalisation of S$977 million. It has established a strong track record since incorporation and have established strong and long standing relationship with its key customers as well as Singapore Post Ltd.
"With the expected growth in the number of listed companies on SGX, Postlink is well positioned to maintain its growth going forward and will contribute positively to the Systech Group. The research and development of digitised AR also augurs well with the overall strategy of the Systech Group," said Systech.
The earnings per share of the Systech Group may be proportionately diluted as a result of the increase in the number of Systech shares after the exercise. The deal is to be completed by the second half of 2017.
Systech shares fell half a sen to close at 29 sen yesterday.