# GSTechnologies Limited Acquire Singapore Cybersecurity Company Semnet Pte

- Link: https://www.directorstalkinterviews.com/gstechnologies-limited-acquire-singapore-cybersecurity-company-semnet-pte/4121135297
- Published: 2023-12-06T07:10:28+00:00
- Author: Ethan Davis

**GSTechnologies Limited** (LON:GST), the fintech company, has announced that the
Company has entered into an agreement to acquire 66.67% of the issued share capital
of Semnet Pte Ltd, 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.

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 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, for a total consideration of US$1.8 million in cash and new shares of no
par value in the Company. Completion of the Acquisition 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 
and the remaining US$1.0 million through the issue of new Ordinary 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 GSTechnologies, 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.”_

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