CTOS 5301 CTOS DIGITAL BERHAD buys out OCBC, Affin Bank, Affin Hwang IB to up stake in RAM to 17.23%
KUALA LUMPUR (April 25): CTOS Digital Bhd has upped its shareholding in RAM Holdings Bhd to 17.23% by buying out the collective 9.1% stakes owned by OCBC Bank (M) Bhd, Affin Bank Bhd and Affin Hwang Investment Bank Bhd (Affin Hwang IB) for RM25.06 million, cash.
In a bourse filing, CTOS said it inked share purchase agreements on Feb 4 and April 25 with OCBC Malaysia, Affin Bank and Affin Hwang IB to acquire 910,000 RAM shares.
According to RAM's website, Affin Bank had 360,000 shares representing 3.6% in RAM as of Monday, while Affin Hwang IB held 200,000 shares (2%); OCBC Malaysia held 350,000 shares (3.5%) in January. This means the three entities are no longer shareholders in RAM as the acquisitions were completed on the same day of the agreements.
CTOS said the acquisition of a strategic minority stake in RAM will allow both companies to leverage each other's expertise in credit assessment, data and analytics to further extend their product offerings and value proposition to their existing customer base.
It said the price it is paying for the additional stake represents 1.6 times RAM's net asset value as of financial year 2020 (FY20), and is 32.8 times its profit after tax — in line with other listed credit rating agencies globally.
"For FY20, RAM generated revenue of RM40 million and profit after tax of RM8.4 million. RAM has total assets of RM188 million and net assets of RM167.2 million," CTOS added.
The transaction translates into share price of RM27.54 per RAM share, CTOS said, which values RAM at RM275.4 million, based on its 10 million issued shares.
This is the second time CTOS is increasing its stake in RAM, following its first purchase of 462,500 shares from CIMB Bank Bhd for a 4.625% stake in RAM for RM10.1 million in July 2021. Subsequently, it bought another 350,000 shares or a 3.5% stake for RM7.61 million from Standard Chartered Bank Malaysia Bhd in December 2021.
The two previous acquisitions were funded by part of the RM220 million it raised from its listing exercise in July 2021 for new acquisitions. The latest stake acquisition will be financed by a combination of the listing proceeds and internally generated funds.
CTOS shares closed one sen or 0.66% higher at RM1.53 on Monday, valuing the credit reporting agency at RM3.53 billion.
http://www.theedgemarkets.com/article/ctos-buys-out-ocbc-affin-bank-affin-hwang-ib-stake-ram-1723
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