KUALA LUMPUR: Zen Tech International Bhd's share price jumped as much as 66.67 per cent to reach 2.5 sen after it said it will take a 70 per cent stake in Alpha Fintech Sdn Bhd for RM10 million cash.
It was one of the most active stocks traded on the stock market.
In a filing with Bursa Malaysia, the IT service management company said it entered into a share sale agreement (SSA) with Koh Chee Siong for the acquisition of 4.16 million ordinary shares, representing a 70 per cent stake in Alpha.
Alpha is principally engaged in selling credit card terminals, prepaid Visa or Mastercard, and other IT activities.
Zen Tech said the proposed acquisition presents an opportunity for the group to acquire an ICT company which is in line with the group's expansion plan with the potential synergistic benefits to be derived from the integration of Aplha with the group and to improve the financial performance of the group's business in the IT and ICT segment in the future.
Although Aplha has been profitable recently, there's no guarantee it will remain so after the acquisition.
To address this risk, Zen Tech has arranged a profit guarantee. It anticipates that Aplha's earnings will eventually boost the group's overall financial performance in the long run.
"In the longer term, the group expects the earnings of Alpha would contribute positively to the overall financial performance of the group," it added.