This article first appeared in The Edge Financial Daily on July 17, 2018
KUALA LUMPUR: Singapore-listed Boardroom Ltd, which is controlled by GK Goh Holdings Ltd, is to buy out Malaysian-based Symphony House Sdn Bhd for S$55.6 million (RM164.1 million) through a cash plus share deal.
Upon completion of the acquisition, Symphony House will become the second largest shareholder of Boardroom holding a 7.63% stake. GK Goh is the single largest shareholder with 87.4% equity interest.
Symphony House was formerly listed on Bursa Malaysia. The company was then taken private by the management led by the founder, Tan Sri Azman Yahya and Datuk Abdul Hamid Sheikh Mohamed through Stone Equity Sdn Bhd in December 2015. Stone Equity, a private vehicle, in which Azman owns 75% and Abdul Hamid 25%.
Based on the filing with the Singapore Stock Exchange (SGX), about RM123.31 million (S$41.8 million), or 75% of the total purchase consideration, will be paid in cash while the balance sum of RM40.83 million will be satisfied through the issue of new Boardroom shares at an issue price of S$0.865 per share.
The issue price represents about 15% premium to the weighted average price of Boardroom’s share price traded on the SGX-ST for the three-month period up to July 12 this year, being the latest practicable date prior to the announcement and a premium of about 103.7% to the net asset value per share as at March 31 this year.
At present, Boardroom has four offices located in Malaysia with the group’s Malaysian operations having generated revenue of S$7 million, which accounted for about 9.8% of the group’s total revenue, based on its financial year ended Dec 31, 2017 (FY17).
“Boardroom provides an immediate entry point and springboard for Symphony House into the regional markets with its established network across the Asia-Pacific. Boardroom has a presence in countries like Singapore, Hong Kong, Australia and even Hong Kong. With this M&A (mergers and acquisitions) exercise, it will help us to expand our footprint regionally,” said Abdul Hamid, Symphony House executive director, when contacted by The Edge Financial Daily.
He added that the transaction presents a win-win situation for both Symphony and Boardroom as they could leverage on each other’s expertise and resources to enhance the service offerings for their clients.
Abdul Hamid explained that a lot of corporates usually operate in multiple countries so it will be even more efficient for Symphony and Boardroom to have a presence regionally.
The parties signed the conditional share sale agreement (SSA) last Friday.
The SSA will see Boardroom acquire Symphony Corporatehouse Sdn Bhd’s unit and three wholly-owned subsidiaries, for about RM164.1 million. Symphony group offers accounting and payroll services, share registration and issuing services for primary market securities offerings.