This article first appeared in The Edge Financial Daily on December 6, 2018

KUALA LUMPUR: A tech unit of Serba Dinamik Holdings Bhd has acquired 30% of information technology (IT) solutions provider eNoah iSolution India Pvt Ltd for RM15 million as part of the group’s expansion into the tech sector, for which it has earmarked RM30 million for the execution of existing and upcoming projects next year.

Serba Dinamik’s wholly-owned subsidiary Serba Dinamik IT Solutions Sdn Bhd (SDIT) signed a share purchase agreement with eNoah yesterday to acquire 251,152 shares, representing approximately a 30% stake in the latter, for US$3.6 million (RM14.94 million).

Both parties also signed a shareholders’ agreement that allows SDIT to regulate affairs of eNoah and sets their respective rights as the company’s shareholders.

The acquisition will be financed from Serba Dinamik’s initial public offering proceeds of RM95 million allocated for business expansion through investments and acquisitions.

At the signing ceremony, Serba Dinamik’s group chief executive officer Datuk Dr Mohd Abdul Karim Abdullah said although the company’s focus remains very much on providing engineering services, it foresees potential growth for its IT division, which currently contributes a little over 1% to the group’s total revenue, but is projected to double its contribution to 2% or 2.5% next year.

“I need to stress here that we are not diverting from what we promised to [our] investors in our prospectus ... [But] we see room for improvement in this segment, especially with IT being the catalyst for changing lifestyles in the future.

“Being a substantial shareholder of eNoah enables us to access state-of-the-art technology in the global market,” he said, adding that it also gives Serba Dinamik a toehold in the Indian market and further strengthens the company’s market presence in the region.

Mohd Abdul Karim said both parties are collaborating to participate in sizeable projects, including one that is infrastructure-related in Singapore.

If the parties can secure the job, it would offer multi-disciplinary work for the group as it will be able to participate in the IT-related aspects and engineering components.

More importantly, the partnership is expected to not only boost some of Serba Dinamik’s existing projects related to systems, applications and products development, and the upgrading of users’ systems in Malaysia, but to also pave the way for the group to aggressively expand into the larger US market, where eNoah has a strong presence, according to Mohd Abdul Karim.

This is because Serba Dinamik will be able to leverage the extensive network of eNoah, which has an operational office in California close to the Silicon Valley.

Established in India, eNoah is principally engaged in providing IT solutions, business process management and support services, as well as software and IT products and platforms to clients. Its business process outsourcing and IT solutions are offered to Fortune 500 companies worldwide in the integrated health, insurance, manufacturing and automative domains. The company has a presence in a number of other countries, including the US, Singapore, Australia and Malaysia.

SDIT is involved in information and communications technology (ICT) software solutions, providing mainly industrial ICT applications that are sold either to customers on a stand-alone basis, packaged with other IT software solutions, or together with the company’s operations and maintenance and engineering, procurement, construction and commissioning contracts.

Serba Dinamik yesterday closed seven sen or 1.87% lower to RM3.68, valuing the company at RM5.4 billion.