Daythree Digital inks underwriting agreement with M&A Securities

From left: M&A Securities associate director Chong Hsu-Yeung, managing director of corporate finance Datuk Bill Tan, Daythree Digital managing director Raymond Davadass and chairman Datuk Ting Heng Peng

KUALA LUMPUR: Daythree Digital Bhd has entered into an underwriting agreement with M&A Securities Sdn Bhd for its listing on the ACE Market of Bursa Malaysia.

In a statement, the tech-driven GBS service provider said M&A Securities will underwrite a total of 36 million new shares made available to the Malaysian public and pink form allocations.

The initial public offering (IPO) entails a public issue of 110.4 million new shares in Daythree Digital, representing 23% of the enlarged share capital and an offer for sale of 12 million existing shares to selected investors by way of private placement.

Of the 110.4 million new shares, 24 million new shares will be made available to the Malaysian public via balloting; 12 million new shares for its eligible directors and employees of Daythree Digital, while the remaining 74.4 million new shares are earmarked for private placement to selected investors.

According to the statement, the proceeds from the IPO will be used to set up a larger digital transformation team to enhance in-house developed digital tools.

Proceeds from the IPO will also be used to part finance the additional working space required for its growing customer base and the expansion of its headquarters to cater for the rising number of employees as well as to set up a multipurpose facility for internal training and meetings.

The remainder of the proceeds will be used for capital expenditure on networking infrastructure, IT hardware and software; branding, marketing and promotional activities; working capital requirements and to defray the estimated listing expenses.

Managing director of Daythree Digital Raymond Davadass said the IPO exercise will allow the company to tap into the equity capital market to capitalise on future growth opportunities.

“According to the independent market research report, the Malaysian GBS industry is projected to maintain its growth trajectory and is expected to grow from RM24.79bil in 2023 to reach RM31.74bil in 2027, representing a compounded annual growth rate of 6.3% during this period.

“Factors boosting the growth within the GBS industry is likely to come from businesses pursuing a leaner capital structure, and increasing outsourcing of business processes to GBS service providers in order to access expertise in smart technologies such as cloud-based solutions, data analytics, and intelligent automation," he said.

He added that Malaysia’s aspiration to attain a digital economy is also expected to lead to more businesses adopting digitisation in their operations, and thus leading to increased demand for GBS services.

Daythree Digital targets to list on the ACE Market of Bursa Securities by July 2023.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO exercise.