KUALA LUMPUR: CTOS Digital Bhd has recently received the nod from its shareholders to undertake a placement of up to 10 per cent of total issued shares to raise a total of RM173.8 million.
In a statement today, the credit reporting agency said the approval allowed it to finalise the issue price of the placement at RM1.58 per share.
The proceeds will partially fund CTOS' RM205.8 million acquisition of a 49 per cent stake in fintech specialist Juris Technologies (JurisTech), with the balance funded by bank borrowings.
The acquisition is slated for completion in the first quarter of 2022.
The company will issue a total of 110.0 million new shares representing 5.0 per cent of the total number of its issued shares.
Upon the listing of the new shares in early March, CTOS' issued share capital will enlarge from 2.20 billion shares to 2.31 billion shares.
CTOS said private equity firm Creador, via Inodes Ltd, had placed 185 million shares at the same price of RM1.58, its first placement since the company's initial public offering (IPO) in July last year.
This pares Inodes' shareholding in CTOS from 40.0 per cent to 30.1 per cent post issuance of the placement.
CTOS said the board decided to raise RM173.8 million through the placement with a view of optimising the amount of equity and debt raised to fund its acquisitions and defray the estimated expenses related to the proposed placement.
"More importantly, CTOS is marking an eventful start to the new year, firstly by obtaining shareholders' approval for our largest acquisition ever in JurisTech, and subsequently gaining investors' confidence for this placement exercise.
"This support certainly spurs us forward in our growth plans as outlined in our strategic roadmap.
CTOS said the management had targeted strong growth in net profit by up to 30 per cent, representing between RM75 million and RM80 million in the financial year ending December 31, 2022 (FY22).
This could be underpinned by new contributions from JurisTech as well as the stronger uplift in its existing businesses in line with the rebounding economy.
"We believe we are only at the cusp of a new growth phase and are optimistic of our prospects going forward."
Echoing the sentiment, Creador does not rule to envision any further sale in the foreseeable future and remains excited about the long-term growth of the company.
The firms expects growth opportunities in new product solutions for key accounts and higher penetration of small medium enterprise (SME) market.
In addition, JurisTech will bring new solutions which are relevant to CTOS Digital and there are significant synergies.
"Based on a report issued by International Data Corp in 2020, Southeast Asia's credit reporting and data solutions industry is expected to grow at an annual compounded growth rate (CAGR) of 10.8 per cent from 2021 to 2025.
"This represents a significant opportunity for CTOS, which counts some of Southeast Asia's largest credit reporting agencies in its portfolio " it ssid.
