In a move which strengthens its South East Asian presence and offers significant and offshore earnings enhancements, JSE-listed Prism Holdings has acquired the Malaysian operations of South African-based electronics payment company, Linkdata Solutions, for an undisclosed amount.
The deal, effective December 1, 2000, will be paid for in rand and carries a projected price/earnings ratio of four with a warrant on future earnings. This follows Prism`s announcement last week of its acquisition of two electronic security divisions from Comparex subsidiary, Nanoteq.
According to Prism CEO Alvin Els, the Linkdata acquisition will be immediately cash positive with earnings in US dollars. Prism has taken over direct control of contracts between Linkdata and two major Malaysian corporates: Petronas, Malaysia`s giant national petroleum corporation, and Pernec, one of that country`s leading technology integration companies.
"Petronas and Pernec have been fully supportive of the acquisition," Els says. "Prism was subcontracted by Linkdata to fulfil part of a contract with Petronas. But over time, our solution offering began encroaching on theirs. Rather than compete head-on, we chose to acquire Linkdata and have a direct channel to a potentially huge customer."
With over 100 subsidiaries and associated companies, the Petronas Group operates in more than 20 countries around the world and is ranked among the Fortune Global 500 companies.
"We are currently involved in detailed discussions with Petronas with a view to growing and strengthening our relationship going forward. In addition, the incorporation of Linkdata`s Malaysian-based skills into Prism Malaysia in Kuala Lumpur strengthens Prism`s base in South East Asia. It also provides us with a solid platform to expand into the rest of the region," he adds.
The Linkdata acquisition brings back together a core group of skills which followed divergent paths in 1994 when Els, along with fellow Prism directors Graham McKay and Mike Serrao, were involved in a management buy-out from Linkdata to establish Prism.
Linkdata`s shareholders will not be involved in any aspect of the combined operations of Prism Malaysia. However, the acquisition does not impact on any of Linkdata`s remaining assets and operations in South Africa.
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