Press Release: Nexgram to acquire Transeaways for RM41.2m [Press – 14 Jan 16]

KUALA LUMPUR 14 Jan 2016 : Nexgram Holdings Berhard (Nexgram) plans to acquire Transeaways Shipping Sdn Bhd (TSSB) for RM41.2 million as part of group on-going growth strategies by way of merger & acquisition.

In a filing with Bursa Malaysia Yesterday, it said that Nexgram has entered into a sales and purchase agreement (SPA) with Hopscoth Invest & Trade Inc. for the proposed acquisition of TSSB which is a shipping agent and logistic tracking service provider.

TSSB is a 17 years logistic player, which specially focus on shipping and logistic trackings having own systems and infrastructure using GPS and RFID technologies among others.

According to Transparency Market Research, the global and China logistics market is expected to grow rapidly during the period from 2015 to 2021 due to an increase in demand for logistics services across several regions. The increasingly prevalent trend of outsourcing adopted by multinational companies throughout the global industrial value chain will primarily drive the global and China logistics market during the forecast period.

Removal of barriers on trading and the subsequent spread of globalization has supported the development of logistics services across all regions. Outsourcing activities in China and many regions across the globe have increased in the recent past. With increasing outsourcing activities, the supply chain has become more complex. Rapid development of the online retailing market has recently fueled the logistics market in China and across the globe. There has been a rise in the number of online deliveries of products due to the growing popularity of online shopping.

Advancements in technology, transaction handling, communication, and development of new products will eliminate the growth barriers for the global and China logistics market during the forecast period. Adoption of transaction tracking systems and applications by the logistics service providers has fuelled the development of the global and China logistics market. Tracking systems such as global positioning system (GPS), bar code systems, and radio frequency identification (RFID) will help develop the market for logistics, not only in China but also in various regions across the globe during the period between 2015 and 2021.

However, the group has recent years diversified into property development business, and the high capital expenditure in technology infrastructure may constrain the group cash flow in other businesses. Divesting lost making investment in exchange for assets with better prospect is part of the group corporate strategies.

The group expects the new venture shall provide positive returns in the next financial year.

The transaction does not require shareholder or authority approvals, and is expected to be completed within first quarter of 2016.

Nexgram Holdings Berhad (“Nexgram Group”) is a public listed multinational investment company based in Kuala Lumpur, Malaysia. As of to date, the group operates through the following segments: Telecommunication, Security & Surveillance, Software Development, Property Development, Industries, Business Advisories and Investment activities.