KUALA LUMPUR (July 10): Shares of Century Software Holdings Bhd (Densof) were up by 1.5 sen or 5% to 33 sen as at 10:21am this morning after it signed a share sale and purchase agreement (SSPA) with Asian Business Software Solutions Pte Ltd (ABSS) yesterday, to acquire 51% stake in the latter.

Censof (fundamental: 2.10; valuation: 0.50) will spend S$10 million (RM28.06 million) to acquire 306,000 shares in 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.

“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,” Censof group managing director Ameer Shaik Mydin said.

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

Censof derives 80% of its revenue from government contracts. Its market capitalisation stands at RM153.3 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)