1. Introduction
The Board of Directors of Excel Force MSC Berhad (“EFORCE” or “the Company”) wishes to announce that the Company has on 31 March 2017 entered into a Share Sale Agreement to acquire its remaining shareholding of 80,000 ordinary shares in Insage (MSC) Sdn. Bhd. (“Insage”), representing 40% of the total issued and paid up share capital of Insage, from Mr. Kek Chin Wu and Ms. Kek Pei Chin holding an equal amount of 40,000 Insage Shares each for a total cash consideration of RM1.00 (“the Acquisition”). Upon the Acquisition, Insage shall be a wholly-owned subsidiary of EFORCE.
2. Background of Insage
Insage was incorporated on 23 May 2006 as a private limited company in Malaysia. The total share capital of Insage is RM200,000.00 comprising 200,000 ordinary shares. The principal activities of Insage, a Multimedia Super Corridor (“MSC”) status company, are research, development and commercialisation of investor relations software and fundamental investment analysis software and other related activities.
3. Basis of arriving at the consideration
The purchase consideration was arrived on a “willing-buyer, willing-seller” basis after taking into consideration the capital deficiency of RM394,941.00 as per the management accounts of Insage as at 31 December 2016.
4. Effects of the Acquisition
The Acquisition is not expected to have any material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholdings of EFORCE for the financial year ending 31 December 2017.
5. Rationale
Insage’s revenue has been on an increasing trend. It grew by 17% and 11% in 2016 and 2015 respectively. We are confident that the revenue will continue to grow in 2017. To achieve Insage’s true potential, we intend to review the cost structure for profit improvement opportunities.
6. Approval required
The Acquisition is not subject to the approval of the shareholders of EFORCE.
7. Statement of Directors
The Board of Directors of EFORCE is of the opinion that the Acquisition is in the best interest of EFORCE.
8. Interests of Directors and/or major shareholders
None of the directors and/or major Shareholders and/or persons connected with a director or major shareholder has any interest, direct or indirect, in the Acquisition.
9. Percentage Ratio
The percentage ratio applicable to the said transaction pursuant to paragraph 10.02(g) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements for the transaction value of RM1.00 is negligible based on the latest audited consolidated financial statements of EFORCE for the financial year ended 31 December 2015.
This announcement is dated 31 March 2017.