Acquisition sees change of direction for GIIB

The financial year ending 31 December 2015 saw Malaysia’s Goodway Integrated Industries Berhad (GIIB), parent company of Goodway Rubber Industries and several other rubber compounding and retreading businesses, record its second consecutive net loss despite a positive contribution from the firm’s new venture into property development. To reverse this trend, GIIB is decreasing its reliance upon the company’s traditional rubber and tyre-related core business, and it has now taken a significant further step in this direction through the acquisition of S5 Systems Sdn Bhd. GIIB says this transaction will result in a “significant change in business direction.”

Integrated security solutions provider S5 Systems, which is valued at RM900 million (£168.1 million), is coming into the GIIB fold from NSA Technology Sdn Bhd in exchange for 1.8 million new GIIB shares. While S5 Systems will become a wholly-owned subsidiary of GIIB, after the transaction NSA Technology will hold a 94.22 per cent share in GIIB.

“The injection of S5 Systems is a significant milestone to GIIB’s corporate history as a listed entity,” states GIIB chief executive officer Tai Boon Wee. “This change in business direction will not only diversify our revenue stream but also position the company in better stead amidst the growing challenges of our manufacturing business against a difficult global business landscape. This corporate exercise will transform GIIB into a different value proposition company and I truly believe, upon completion, will further enhance shareholders’ value.”

Chua Yu Ye, deputy chief executive officer of S5 Systems, adds: “We are definitely excited about the journey ahead. Being part of a listed entity will enable S5 Systems to grow to a wider market and industry vertical. I see that our strength in providing technology and security solutions to continue where security, identity management and enforcement is paramount for most countries around the world.”

Once the acquisition has been finalised, NSA Technology proposes to offer up to 165.8 million GIIB shares for sale to existing GIIB shareholders, on the basis of three shares for every two shares held by each shareholder. NSA Technology will also place up to 440.0 million GIIB shares to as-yet undisclosed investors. These shares will be priced via a book building process.