KUALA LUMPUR: Citaglobal Bhd is expanding the scope of its renewable energy and telecommunications business with the acquisition of a 30% stake in submarine cable systems company iFACTORSThe deal is expected to be earnings accretive for Citaglobal, with the acquisition coming with a two-year net profit guarantee of RM21 million, and iFACTORS having an orderbook of RM528 million.
iFACTORS is principally involved in the business of maintenance and services of telecommunication equipment and components. Incorporated in 1997, it provides niche solutions in the maintenance and implementation of optical submarine cable networks, particularly in the area of repeaterless submarine cable systems.
In addition, a share purchase agreement has been entered with the vendor, Abu Bakar Sutan Taharudin, for the acquisition of 789,475 iFACTORS shares comprising a 25% stake for RM21.2 million. The profit guarantee of RM21 million translates to an average profit guarantee of RM10.5 million per financial year, and an implied price-to-earnings multiple of approximately 8 times forward earnings.
Presently, iFACTORS has an orderbook of approximately RM528 million, with an outstanding orderbook of approximately RM300 million. Its outstanding orderbook mainly comprises projects related to the engineering, procurement, construction, installation, commissioning, maintenance, and leasing of subsea fiber optic cables or submarine cables.