KUALA LUMPUR: TechnoDex Bhd (TDEX) is currently pursuing a merger and acquisition (M&A) strategy to boost its bottom line.
The New Straits Times (NST) has learned that TDEX is actively looking for ventures that would complement its existing information technology (IT) business models.
When contacted, a company spokesperson declined to comment.
TDEX was listed on the ACE market of the stock exchange in 2006 and is involved in the provision of various IT solutions and services.
An industry source that NST reached out to said TDEX has a variety of clients, including the public sector such as the education ministry and the Penang state government.
He also shared that TDEX's hardware division, which include point-of-sale solutions, had expanded its reach to neighbouring countries such as Thailand and the Philippines.
"TDEX had also planned to expand aggressively into Indonesia and Cambodia this year, but I was told that such initiatives have been postponed due to travel restrictions as a result of the Covid-19 pandemic," he said.
He added that TDEX has also been actively encouraging its clients to embrace latest technologies which incorporate artificial intelligence, machine learning and advanced analytics so that they realise greater productivity and operational efficiencies.
"Cybersecurity is another area that TDEX has been emphasising for its clients to focus on," he said.
"TDEX is constantly emphasing to clients for their IT infrastructures to be 'air tight' so as not to get hacked, or get hit by ransomware," he added.
The source added that, pre-movement control order (MCO), the TDEX group has been actively tendering for more IT contracts including the provision of computer hardware leasing services.
"The TDEX group has also actively tendered for contracts involving software development, together with the supply of computer hardware and point-of-sales terminals."
The silver lining of the MCO for TDEX is that the bulk of its clients have come to fully appreciate the importance of digitising their business models, he said.
"As such, a successful M&A exercise that would complement TDEX's existing business models bodes well in differentiating TDEX's value proposition to competitors."
TDEX in an announcement to Bursa Malaysia dated 5 November 2019, said it would be embarking on a 30 percent placement exercise in an attempt to raise some RM7.1 million.
However, due to market conditions, it is believed that the company would raise less than that amount once the exercise has been completed.
Proceeds from the exercise would in turn be used business expansion, and for what is categorised as 'for IT contracts/orders'.
The latter entails the funding of performance bonds required for IT contracts, purchase of inventories, insurance, mobilisation cost and staff cost for the implementation of IT contracts.