KUALA LUMPUR (Dec 27): Kronologi Asia Bhd plans to acquire IT infrastructure company Sandz Solutions (Singapore) Pte Ltd for RM75 million using a combination of cash and new share issuance, which will pave the way for the emergence of a new single, largest shareholder in the group.

The deal, if it gains shareholders' and authorities’ approvals, will see Sandz' current owner, Desert Streams Investment Ltd (DSIL) that is controlled by Enrique Galang Velasco, becoming Kronologi's single, largest shareholder with a 23.65% stake, according to Kronologi's stock exchange filing today.

Kronologi said Sandz provides IT infrastructure solutions services in Philippines, and that the acquisition comes with a profit warranty of US$1.5 million profit after tax from Sandz for the financial year ending Dec 31, 2019.

The proposed acquisition will be satisfied via the issuance of 123.57 new Kronologi shares at an issue price of 56.65 sen apiece, and RM5 million cash.

On completion of the deal, Kronologi’s executive director and current single largest shareholder Tan Jeck Min will see his 13.82% shareholding — as at Dec 26 — diluted to 10.55%. The group's acting chief executive officer Teo Chong Meng Philip Dominic’s shareholding will also be diluted from 6.33% to 4.83%.

Kronologi said the acquisition will complement its existing business segments and allow it to expand into Philippines through Sandz, and that both parties will be able to leverage on each other’s expertise.

Kronologi expects to complete the acquisition in the first quarter of 2019. TA Securities Holdings Bhd has been appointed adviser for the proposed acquisition.

Kronologi shares closed 0.5 sen or 0.89% higher at 57 sen today, giving it a market capitalisation of RM227.32 million.