Reverse takeover for Ancom Logistics by S5 Holdings vendors

Ancom Logistics Bhd will exit the logistics business under the exercise which includes a RTO of ALB by S5 Holdings Inc – a global integrated security solutions provider.

KUALA LUMPUR: Ancom Logistics Bhd (ALB) is acquiring S5 Holdings Inc – a global integrated security solutions provider – under a corporate exercise which will ultimately see a reverse takeover of ALB.

In a statement to Bursa Securities on Thursday, ALB said it had entered into a heads of agreement with the vendors – S7 Holdings Sdn Bhd, Merrington Assets Ltd, MY E.G. Bhd's unit MY E.G. Capital Sdn Bhd (MYEG Capital) and Avocat Sdn Bhd.

Under the agreements, ALB will acquire S5 Holdings Inc. from the vendors at a price to be agreed by the parties in exchange of ALB shares based on 10 sen per share.

According to the statement S5 Group is a global integrated security solutions provider, delivering real solutions and quantum-leap advances to both governments and enterprises.

S5 Group provides the expertise and solutions to meet national challenges in homeland security, defence, and intelligence, areas of vital importance to national interests.

"The proposals have potential, subject to independent valuations, due diligence and finalisation of definitive agreements, to enable the shareholders of ALB to unlock the value of their investments in the company and to participate in potential new businesses," ALB said.

S7 Holdings owns a 76.38% stake in S5 while Merrington Assets and MY E.G. Capital own a 10% stake each and Avocat 3.62%.

In return, ALB will issue new ordinary shares to the vendors, which would then undertake a mandatory general offer for the remaining shares of ALB upon completion of the proposed acquisition.

In a separate statement to Bursa, MY E.G. said the proposed RTO would also provide an avenue for the company to unlock its initial investment, whereby its stake in S5 would be listed on the Ace Market of Bursa Malaysia Securities.

“Furthermore, the RTO will enable S5 to gain access to public markets, boosting its corporate profile and brand reputation, enhancing its value through improved liquidity and prospective interest from a broader and more diverse investor base, ” it said.

Syed Mohammad Hafiz Syed Razlan owns a 51% stake in S7, Kamarul Baharain Ghazali 30% and Jennie Tan Jen Yih the remaining 19%.

Under the exercise, ALB is selling its existing core logistics and warehousing business to its 50.25% owned Nylex (Malaysia) Bhd as part of the group restructuring.

Ancom Logistics will dispose of its unit Synergy Trans-Link Sdn Bhd, which is involved in warehousing and logistics, to Nylex at a valuation to be agreed by both parties.

At present, Ancom Logistics owns Pengangkutan Cogent Sdn Bhd, a company involved in transportation of liquid chemical business in Malaysia and Singapore; and 51% equity interest in Ancom ChemQuest Terminals Sdn Bhd, a company involved in building, owning, operating, leasing and managing a chemical tank farm in West Port, Port Klang.

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