Censof acquires additional 30.87% stake in software firm ABSS for US$3.5mil
By Digital News Asia January 26, 2021
- Purchase follows on heels of strong financial performance in past 12 months
- Deal allows Censof to expand business in SME segment, deepen SEA reach
Censof Holdings Bhd (Censof), a technology holdings company specialising in financial management software solutions, yesterday announced that it has entered into a Share Sale and Purchase Agreement (SSPA) to acquire a collective 162,305 ordinary shares, representing approximately a 30.87% equity interest in Asian Business Software Solutions Pte Ltd (ABSS) from minority shareholders.
The US$3.49 million (RM14.1 million) purchase consideration was arrived at a willing-buyer, willing-seller basis after taking into consideration, amongst others, the historical financial performance of ABSS, the value of the proprietary software portfolio and the prospects of ABSS moving forward. The purchase consideration shall be satisfied via proceeds from a proposed private placement exercise of up to 20.0% of its total number of issued shares to third party investors to be identified later, under the general mandate pursuant to Sections 75 and 76 of the Companies Act 2016.
Based on an indicative issue price of RM0.25 per placement share, the proposed private placement can raise gross proceeds of up to RM25.1 million. In addition, the proceeds have also been earmarked to fund the working capital requirements and the estimated expenses associated with the placement exercise.
[RM1 = US$0.248]
Based on the SSPA, the minority shareholders, namely Paul Alistair Jennings, Fox Equities Pty Ltd and Lum Chong Eu will dispose 117,470, 38,220 and 6,615 ordinary shares, representing 22.34%, 7.27% and 1.26% interest in ABSS respectively.
ABSS is a developer and a supplier of ABSS-branded financial management and accounting software that supports the Asian small and medium enterprises (SMEs), and cloud-based accounting product, namely Financio, catering for startups and entry level SMEs. Censof initially acquired ABSS back in 2015 and is presently holding 58.20% equity. Following this transaction, the stake will increase to 89.07%, while the remaining minority interest is held by Paul Alistair Jennings (5.90%) and Rhys Brown (5.03%).
“ABSS is well-established and widely known as the market leader amongst the SMEs in Singapore and Hong Kong. The company has delivered continuous strong growth and contributed to Censof’s earnings since our initial acquisition in July 2015. We are pleased to have reached this agreement that essentially increased our equity interest in ABSS to over 89%,” said Ameer Shaik Mydin (pic), group managing director of Censof.
“The acquisition is in line with our strategies and is a compelling opportunity for us to expand our business in the SME segment, as well as strengthening our footprint in the Asian market,” he adds.
Censof is confident that this strategic investment will provide it with sustainable profitable growth and accelerate its position in the SME market within the Asian region in the near term.
Ameer notes that the proposed private placement exercise is the most cost-effective manner for the company to raise funds without incurring interest expenses as compared to bank borrowings.
“ABSS is delighted to recognise increased investment by the Censof group. Following a strong financial performance the past 12 months, this investment will ensure ABSS is well placed to deliver future growth and accelerate SME Accounting automation across Southeast Asia,” said Rhys Brown, chief executive director of ABSS.