CTOS Digital Berhad has provided additional details on its proposed RM50 million disposal of a 10% stake in Juris Technologies Sdn Bhd, including the basis for the valuation and the rationale for securing a call option to repurchase the stake if a planned exit event does not materialise.
The credit ratings firm said the additional information relates to its earlier announcement on July 22 regarding the proposed sale of 100,000 ordinary shares in Juris, representing 10% of the company’s issued share capital, to Natsoft (M) Sdn Bhd.
The disposal values Juris at an equity valuation of RM500 million.
CTOS said the valuation was determined after reviewing nine listed technology and software-related companies across Asia operating in broadly comparable sectors with similar business characteristics and scale.
As Juris is an unlisted company with a niche business model and no directly comparable listed peers, the board used the closest available benchmark companies for its assessment.
Based on the review, the median trailing 12-month price-to-earnings (P/E) multiple of the selected companies was approximately 16.4 times, broadly in line with the 17.0 times P/E multiple implied by Juris’ agreed RM500 million valuation.
The board also took into account that Juris, being privately held, does not benefit from the liquidity, market access, investor base and price discovery typically associated with publicly listed companies.
CTOS also explained the rationale for including a call option that allows the company to repurchase the 10% stake if a planned exit event fails to materialise within the agreed timeframe.
According to the company, the option is intended to protect its long-term investment interests by allowing it to restore its shareholding in Juris to 49% at the same valuation at which the stake was sold.
The board said this would provide CTOS with the flexibility to pursue alternative monetisation opportunities for its investment in Juris should the anticipated exit event not proceed as planned.
The proposed disposal remains subject to the terms and conditions outlined in the sale agreement previously announced by the company.
