Systech’s Strategic Expansion: A Deep Dive into the Wilstech Acquisition

Systech Berhad’s recent EGM underscored a unanimous shareholder endorsement for the RM75 million acquisition of Wilstech Sdn Bhd, a move that’s set to significantly bolster Systech’s capabilities in e-business solutions and cybersecurity. Here’s a closer look at the financial aspects that got the shareholders excited:

Financial Highlights from the EGM

• Acquisition Cost: Systech has agreed to acquire Wilstech for a total of RM75 million, comprising RM20 million in cash and the balance through the issuance of 152.78 million new Systech shares at an issuance price of 36 cents per share.

• Capital Raising: To finance the acquisition and fuel further growth, Systech is issuing 114 million new shares aimed at raising approximately RM51.84 million.

• Bonus Issue of Warrants: In a move to reward existing shareholders and enhance investor appeal, Systech also plans a bonus issue of up to 160.656 million new warrants, allocated at one warrant for every four existing shares held. This approach not only values current shareholders but is expected to improve liquidity and marketability of Systech shares.
 

•Profit Guarantee: Wilstech comes with a profit guarantee of RM5 million for the financial year April 1, 2024, to March 31, 2025, which aligns well with Systech’s profitability strategies and reassures shareholders about the financial prudence of this acquisition.
 

The overwhelming support from the shareholders at the EGM reflects confidence in the strategic fit of Wilstech into Systech’s broader business model. Wilstech’s expertise in IT solutions is expected to complement Systech’s current offerings, with potential cross-selling opportunities and enhanced service delivery capabilities in the burgeoning digital market.

The strategic acquisition of Wilstech is anticipated to enhance Systech’s revenue streams and profitability through expanded services and new market penetrations. With Wilstech’s integration, Systech is not only looking at immediate financial benefits from the profit guarantee but also long-term growth from synergies and expanded customer base, which could see significant returns on investment.

As Systech embarks on this transformative journey with the solid backing of its shareholders, the tech industry watches on, anticipating a new era of growth and innovation that this merger promises to bring Systech to propel company forward with acquisition of Wilstech.