KUALA LUMPUR (Dec 8): Credit-reporting agency CTOS Digital Bhd on Wednesday (Dec 8) acquired an additional 3.5% stake in bond-rating firm RAM Holdings Bhd for RM7.61 million from Standard Chartered Bank Malaysia Bhd in a move which will allow CTOS and RAM to leverage each other's expertise in areas including credit assessment and data.

In a statement to Bursa Malaysia on Wednesday, CTOS, which already owned an estimated 4.6% stake in RAM, said it on the same day entered into a share purchase agreement (SPA) with Standard Chartered to acquire the 3.5% stake comprising 350,000 shares in RAM.

"The purchase consideration for the proposed acquisition shall be wholly satisfied by cash proceeds raised for new acquisitions from the recent initial public offering (IPO) exercise [of CTOS].

"Both companies are expected to benefit from the partnership — from potential synergies in [their] product offerings and customer bases.

"Barring any unforeseen circumstances, the proposed acquisition is expected to be completed on the same day of the SPA," CTOS added.

In a separate press statement attached to CTOS' Bursa filing, it said it earlier acquired 462,500 shares for the estimated 4.6% stake in RAM in July 2021 for RM10.1 million.

CTOS said the previous purchase was also fully funded by its IPO proceeds.

The acquistion of Standard Chartered's 3.5% stake in RAM by CTOS means Standard Chartered will no longer own any shares in RAM, which has 10 million issued shares, according to RAM's website.

The website shows that Oscar Matrix Sdn Bhd is RAM's largest shareholder with a 19.9% stake, followed by S&P Global Asian Holdings Pte Ltd with a 19.2% stake.

At RM7.61 million, CTOS' acquisition of the additional 350,000 shares in RAM translates into a price per share of RM21.74, valuing RAM at RM217.4 million based on the company's 10 million issued shares.

CTOS in its Bursa filing said the purchase price for the additional 350,000 RAM shares was based on a willing buyer, willing seller basis after taking into consideration that the purchase price represents 1.3 times RAM's financial year 2020 (FY20) net asset value and 25.9 times profit after tax to be in line with the other listed credit rating agencies globally.

"For FY20, RAM generated revenue of RM40 million and profit after tax of RM8.4 million.

"RAM has total assets of RM188 million and net assets of RM167.2 million," CTOS added.

At Wednesday's afternoon break, CTOS' share price had risen four sen or 2.31% to RM1.77, valuing the company at about RM3.82 billion.

CTOS has 2.16 billion issued shares, according to the company's latest quarterly financial report.