KUALA LUMPUR: Credit reporting agency CTOS Digital Bhd has acquired a 4.6% minority stake in credit rating agency RAM Holdings Bhd (RAM) for RM10.1mil, making its first post-listing acquisition.
Yesterday, CTOS entered into a share purchase agreement (SPA) with CIMB Bank Bhd to acquire 462,500 ordinary shares representing a minority stake in RAM.
In a statement, the group said the valuation was arrived on a willing buyer and willing seller basis, adding that approvals were not needed by CTOS’s shareholders or other regulatory authorities for the transaction.
CTOS group chief executive officer Dennis Martin (pic) said the group will look to realise the value of the acquisition as both companies have strong synergies in product offerings and customer base.
“RAM is the market leader in bond rating industry in Malaysia.
“They also offer a range of solutions ranging from economic and debt market research, data and analytics and sustainability services,” he added.
The exercise is expected to be completed on the same day as the SPA.
CTOS made its debut on the Main Market of Bursa Malaysia last Tuesday.
The group’s net profit jumped 56% to RM11.84mil for the second quarter ended June 30, 2021 from RM7.5mil a year ago.
For the six months ended June 30, 2021, the agency recorded a higher net profit of RM19.53mil from RM15.62mil a year ago.
Revenue for that period increased to RM75.80mil, as compared to RM64.73mil in the corresponding a year ago, with a strong contribution from Malaysian and international operations.
Dennis had earlier said CTOS would continue to expand its product offerings and customer reach organically and through acquisitions in the Asean region.
He added that the group would remain committed in balancing sustainable growth and rewarding its shareholders while growing its track record.
According to Kenanga Research, CTOS is poised to benefit from a growing customer base as well as expansion of product offerings in an underpenetrated market. “We also like its resilient business model and future plans to tap into new sectors with tremendous growth potential.
“With its market leader status, more robust industry growth, superior earnings growth and scarcity premium for Asean-listed credit reporting agency, it deserves a greater valuation premium,” Kenanga said in its report initiating coverage on the stock.
CTOS was also reported to be looking at expanding into new sectors such as automotive, insurance and real estate.