Friday 29 Mar 2024
By
main news image

KUALA LUMPUR: Censof Holdings Bhd, which derives 80% of its revenue from government contracts, will spend S$10 million (RM28.06 million) to acquire a 51% stake in Asian Business Software Solutions Pte Ltd (ABSS) as part of its plan to diversify its customer base to include  regional small and medium enterprises (SMEs).

ABSS currently develops, sells and markets MYOB-brand accounting software products to SMEs, with its principal markets being Singapore, Malaysia and Hong Kong.

Censof yesterday signed a share sale and purchase agreement (SSPA) with ABSS to acquire 306,000 shares or a 51% stake in the latter.

“We are already serving the SME market through Censof ABSS Sdn Bhd, a joint venture (JV) with ABSS that was incorporated in October last year to distribute and market MYOB Premier and MYOB accounting software products in Malaysia,” Censof group managing director Ameer Shaik Mydin told a news conference, after the signing of the SSPA yesterday.

The JV generated approximately RM8.3 million in sales revenue as of March 2015, contributing about 16% of Censof's wholly-owned subsidiary Century Software (M) Sdn Bhd’s coffers, and enhanced the group’s client base in the SME market.

“Due to ABSS’ strong regional presence, we are now able to unlock the synergy through this [51% stake] acquisition by tapping the regional SME markets,” said Ameer.

Censof deputy group managing director Tamil Selvan Durairaj said the acquisition will allow Censof to serve the Tier 3 and Tier 4 markets.

“Tier 3 and Tier 4 markets are basically the mass markets, ranging from [sole proprietors] to organisations with up to 50 employees. Tier 1 and Tier 2 markets, on the other hand, are larger organisations with more comprehensive needs when it comes to accounting software.

“Censof’s focus has always been Tier 1 and Tier 2, but with this acquisition, we are now able to serve all four tiers of the market,” said Tamil Selvan.

ABSS group managing director Paul Alistair Jennings said the goods and services tax (GST) had caused a “category change” for accounting software businesses.

“In Malaysia alone, [the] ABSS group has seen some 400% growth in revenue year-on-year for the first half ended June 30, 2015, due to the [implementation of the] GST. We also have our ongoing recurring revenue base in terms of software maintenance and upgrade services,” said Jennings.

Censof shares closed up 1.61% at 31.5 sen yesterday, with a market capitalisation of RM150.87 million.

 

This article first appeared in The Edge Financial Daily, on July 10, 2015.

      Print
      Text Size
      Share