KUALA LUMPUR (Sept 23): ManagePay Systems Bhd is acquiring a 29.5% stake in a cybersecurity firm Trustgate Bhd for RM1.8 million cash, to tap into the online security business.

In a filing with Bursa Malaysia today, the electronic payment specialist said it has entered into a conditional share purchase agreement with Trustgate chief executive officer Lo Nyan Tjing to acquire 8.84 million shares (29.5%) in Trustgate.

Lo holds a 33.33% stake in Trustgate, according to the filing. The remaining 66.67% is held by Sigmaview Diversified Sdn Bhd.

Based on the audited consolidated financial statements of Trustgate for the financial year ended Dec 31, 2014, Trustgate registered a loss of RM612,756 while its net assets then was RM5.49 million.

More importantly, Trustgate owns 94.43% of MSC Trustgate, one of only three licensed Certificate Authorities approved by the Malaysian Communications and Multimedia Commission.

MSC Trustgate, said ManagePay, has been in the business of providing cybersecurity products and services for over 10 years in Malaysia and has established strong clientele which include major financial institutions in Malaysia.

ManagePay said the acquisition "will enable the group [to] leapfrog into the cybersecurity business supplying [such service] to financial institutions and payee organisations".

Aside from providing the group with additional revenue source, ManagePay said the deal will enable it to tap into a trusted and proven platform for securing internet of things (IoT) devices and infrastructure in Malaysia for the near future.

"The acquisition will enable us to derive business synergies through the cross selling and bundling of product offerings. The acquisition will enable ManagePay to offer its existing customers a proven security product solution to preserve the integrity of the clients' data and infrastructure," it said.

The purchase consideration will be satisfied in cash and funded through internally generated funds, it added.

"Barring any unforeseen circumstances, the acquisition is expected to be completed in the fourth quarter of 2015," it said.

The group expects the deal to contribute positively to its earnings in the ensuing financial years.

Shares in ManagePay surged six sen or 30% higher to close at its one-month high of 26 sen today, after some 11.85 million shares changed hands.

The current price gives it a market capitalisation of RM177.62 million.

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