KUALA LUMPUR (July 18): Goodway Integrated Industries Bhd is acquiring security solutions provider S5 Systems Sdn Bhd from NSA Technology Sdn Bhd for RM900 million.

In a filing with Bursa Malaysia today, Goodway said it has inked a share sale agreement with NSA Technology for the injection of the entire equity interest of S5 Systems into Goodway for 1.8 billion new Goodway shares at an issue price of 50 sen per share.

In conjunction with the corporate exercise, there will be an offer for sale by NSA Technology of up to 165.8 million Goodway shares to existing Goodway shareholders at 50 sen per share, on the basis of three shares for every two shares held.

Additionally, NSA Technology will also be placing up to 440 million Goodway shares to investors to be identified at a price to be determined via book building.

At present, Goodway chief executive officer (CEO) Tai Boon Wee controls some 26.31 milllion or 23.8% of Goodway shares, while Lembaga Tabung Angkatan Tentera has 12.5 million shares or an 11.3% stake in the company.

S5 Systems is an award-winning holistic security solutions provider to various governments, governmental bodies and enterprises.

Its scope of services covers the provision of holistic security solutions, system integration and implementation, national security advisory and information technology consultancy and solutions.

The Goodway group is principally involved in the manufacture of rubber compound and other related products, retreading of tyres for commercial vehicles and property development and construction.

In a statement, Tai said the injection of S5 Systems is a significant milestone in 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," he said.

The proposed acquisition is expected to provide the shareholders of Goodway, which has been loss making since its financial year ended December 2014 (FY14), with an opportunity to participate in a new core business that is profitable with growth potential and steady stream of cashflow.

Notwithstanding the introduction of the new core business of S5 Systems as an information, communications and technology solutions provider, the enlarged Goodway group intends to continue with its existing rubber related businesses.

S5 Systems deputy CEO Chua Yu Ye stated that being part of a listed entity will enable S5 Systems to grow to a wider market and industry.

Trading in Goodway shares will resume tomorrow after its suspension today due to the acquisition announcement.

Its share price had more than doubled from 22 sen on June 27 to a one-year high of 46 sen last Friday (July 15).

On July 14, the company was issued an unusual market activity (UMA) query by Bursa Malaysia due to the sharp rise in its share price. Goodway replied that the UMA was due to it being in talks for a potential acquisition.