Ingenuity to acquire hardware distribution firm for RM15mil

Ingens(0034) an ACE market stock will acquire a new firm, I think this stock will be boom since this company is aline with Malaysia Wawasan 2020.
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KUALA LUMPUR, July 23, 2011 : ACE Market-listed Ingenuity Solutions Bhd plans to acquire a hardware distribution company to complement its core enterprise software business.
Ingenuity yesterday signed a heads of agreement for the proposed purchase of 100% in Vistavision Resources Sdn Bhd from Landasan Simfoni Sdn Bhd and Titanium Hallmark Sdn Bhd.
In an announcement to Bursa Malaysia, Ingenuity said it planned to buy Vistavision for RM15.45mil to be satisfied via the issuance of 154.52 million new ordinary shares of 10 sen each in Ingenuity.
Ingenuity is looking at six times price-earnings of forecast profit after tax for Dec 31, 2011.
“With the signing of the heads of agreement, we are incorporating Vistavision’s expertise as a distributor in the provision of hardware and its solutions to complete our plan to further expand regionally, especially in vibrant markets such as Thailand, Indonesia and China,” Ingenuity chief executive officer Ahmad Ruslan Zahari told a briefing.
Vistavision, which has about 500 customers consisting of Tier-2 and 3 dealers and retailers, achieved monthly average sales of RM17.5mil in 2010.
It distributes IT hardware such as peripherals, computer accessories and telecommunication products for brands like Acer, Toshiba, MSI and ZTE.
The acquisition is deemed synergistic as Vistavision’s expertise in hardware distribution will complement Ingenuity’s core business in ready-made and customised software.
Vistavision executive director Low Gah Luen said the acquisition would enhance the company’s visibility with the government, corporate and end-user markets by way of affiliation with a public-listed company.
Ingenuity chairman Datuk Feroz Moidunny said the company was considering to buy Vistavision by paying cash, through a combination of cash and shares, or exchange of shares.
It recently concluded a rights issue which was 83.52% subscribed and raised RM24.3mil.
“We have the funds to acquire Vistavision but we want to keep our options open on which method to use,” Feroz said, adding that proceeds from the rights issue could be utilised.
Ingenuity has until late October to settle its terms of acquisition, due diligence and purchase price.
In late May, the company was in the news for receiving two unusual market activity queries from Bursa Malaysia within three weeks.
Its shares were reportedly actively traded since late April and almost doubled, hitting a 52-week high of 45 sen and then suspended temporarily.
Ahmad Ruslan said this was a reaction by the market to Ingenuity’s restructuring exercise.
At market close yesterday, its shares were among the day’s actively traded and rose one sen to 10.5 sen.

Source:The Star