Goodway Buys Security Solutions Firm in Reverse Takeover Exercise
Goodway Integrated Industries Bhd is diversifying into the national security solutions sector by buying the entire equity interest in S5 Systems Sdn Bhd for RM 900 million. To be paid with new Goodway shares, the purchase will result in the vendor, NSA Technology Sdn Bhd, becoming Goodway’s controlling shareholder. In a filing with Bursa Malaysia, Goodway said it had inked a conditional agreement whereby it would pay NSA by issuing 1.8 billion new Goodway shares at 50 sen each.
Under the corporate exercise, it was also proposed that the vendor undertake a restricted offer for sale of the rights to allotment of up to 165.776 million consideration shares to the entitled Goodway shareholders on the basis of three rights shares for every two shares held at an entitlement date to be determined.
S5 Systems, a Multimedia Super Corridor company with pioneer status, derives its income mainly from immigration security projects in Malaysia and overseas, such as India, the Philippines and Vietnam.
After the proposed acquisition and proposed offer for sale NSA Technology will end up with an 85.54% stake. Chief executive officer and group managing director Tai Boon Wee’s effective (direct and indirect) stake in Goodway will fall from 31.26% to 2.72% while the Armed Forces Fund Board’s (LTAT) direct interest in Goodway will shrink from 11.32% to 0.96%.
Goodway proposed that NSA and persons acting in concert with it be exempted from the obligation to undertake a mandatory take-over offer for all the remaining voting shares in Goodway not already owned by them after the proposed acquisition.
The vendor, it was announced, also plans to place the rights to allotment of up to 440 million consideration shares to investors to be identified via book building amounting to at least RM220mil.
“The injection of S5 Systems is a significant milestone to Goodway’s corporate history as a listed entity. This change in business direction will not only diversify our revenue stream but also position the company in better stead amidst the growing challenges of our manufacturing business against a difficult global business landscape,” Tai said in a joint press statement.