REG - GSTechnologies Ltd - Acquisition of Semnet Pte Ltd

GSTechnologiesAnnouncement

06/12/2023 07:00

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RNS Number : 7891V  GSTechnologies Ltd  06 December 2023

6 December 2023

GSTechnologies Limited

("GST" or the "Company" or the "Group")

Acquisition of Semnet Pte Ltd

 

GSTechnologies Limited (LSE: GST), the fintech company, is pleased to announce
that the Company has entered into an agreement (the "Agreement") to acquire
66.67% of the issued share capital of Semnet Pte Ltd ("Semnet"), a
cybersecurity company based in Singapore, for a total consideration of US$1.8
million, payable through US$0.8 million in cash and US$1.0 million in new
shares in the Company, as detailed below (the "Acquisition").

Semnet is a profitable cybersecurity business that will provide the Company
with expertise and licences that the Directors believe are a critical
component to the advancement of the Company's GS Money and B2B Neobanking
operations.  Cybersecurity is of particular importance to the Company's
developing global Neobank ecosystem which has recently been enhanced by the
acquisition of PAYPT finance Ltd, now renamed Angra Global, as announced on 15
August 2023.

Angra Global started onboarding customers on 1 September 2023 and Semnet's
cybersecurity expertise will enable the Company to build a dedicated
cybersecurity team to support client onboarding and its operational
activities, including the wider provision of white-label software solutions to
global money service businesses.  In addition, Semnet will continue to
support and grow its client base in other sectors, providing an additional
profitable revenue stream for the Group.  Semnet is licensed by the Cyber
Security Regulatory Office (CRSO) in Singapore.  Further information on
Semnet may be found at: https://www.semnet.co (https://www.semnet.co)

Further details of the Acquisition

The Company has entered into the Agreement to acquire 66.67% of the issued
share capital of Semnet from two of Semnet's directors, Choo Seet Ee and Zheng
Kang Wen Mervyn (together the "Sellers"), for a total consideration of US$1.8
million in cash and new shares of no par value in the Company ("Ordinary
Shares"). Completion of the Acquisition ("Completion") is subject, inter alia,
to the agreement of a completion assets statement, which may require
adjustment of the consideration upwards or downwards, and no material adverse
change having occurred in the Semnet business.  Completion is expected to
occur two months following the entering into of the Agreement, or earlier as
may be agreed between the parties.

US$800,000 of the total consideration payable to the Sellers is payable in
cash ("Cash Consideration") and the remaining US$1.0 million through the issue
of new Ordinary Shares ("Consideration Shares").  US$80,000 of the Cash
Consideration has been paid and the remaining US$720,000 is payable as to
US$500,000 on Completion and the remaining US$220,000 is payable four months
from Completion.  Should Completion of the Acquisition not occur the Company
is entitled to the return of the US$80,000 consideration already paid if it
has fulfilled its obligations under the Agreement.

The Company will issue the Consideration Shares on the nine month anniversary
of Completion, or on any earlier date designated by the Company giving not
less than seven days' notice in writing to the vendors, at a price per
Ordinary Share equal to the average of the middle market quotations for a
Consideration Share as shown by the daily Official List of the London Stock
Exchange for the last five full trading days immediately preceding the payment
date.

The remaining 33.33% outstanding shares in Semnet are owned by Ong Siew Phek
(23.33%) and Lam Pek San (10%).  Ong Siew Pek is the spouse of the Company's
Executive Director and CEO, Jack Bai.  As Ong Siew Pek is a related party of
a director of the Company, the Company considers the Acquisition to be a
Material Related Party Transaction as defined under DTR 7.3.6.  The Company's
Executive Director and CEO, Jack Bai, has therefore not participated in the
GST Board resolution to approve the Acquisition and the Company's independent
directors consider that the terms of the Acquisition are fair and reasonable
from the perspective of the Company and its independent shareholders.

In its most recently published unaudited accounts, to 30 September 2022,
Semnet had a turnover of US$4.22 million and reported profit before tax of
approximately US$0.21 million.

Further announcements will be made as appropriate including if the Acquisition
is terminated for any reason or when Completion occurs and the Consideration
Shares are issued.

Tone Goh, Chairman of GST, Chairman of GST, commented: "This strategic
acquisition represents a further important step in the Company's journey.
 Our commitment to innovation and excellence remains unwavering, and having
inhouse cybersecurity expertise and capability is important as we continue to
build a B2B Neobank providing next-generation digital money solutions. We look
forward to providing updates in due course on the the progress of this
acquisition and the subsequent enhancements it brings to our fintech
offerings."

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR").

 

Enquiries:

The Company

Tone Goh, Executive Chairman

+65 6444 2988

 

Financial Adviser

VSA Capital Limited

+44 (0)20 3005 5000

Simon Barton / Thomas Jackson

 

Broker

CMC Markets

+44 (0)20 3003 8632

Douglas Crippen

 

Financial PR & Investor Relations

IFC Advisory Limited

Tim Metcalfe / Graham Herring / Florence Chandler

+44 20 (0) 3934 6630

gst@investor-focus.co.uk

 

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