Cosmos Technology International Bhd has announced plans to acquire a 51% stake in Orisystems Opto Sdn Bhd for RM16.52 million as part of its strategy to diversify into the electronic manufacturing services (EMS) sector. The acquisition will be executed through the issuance of new shares in Cosmos.

In a filing with Bursa Malaysia on October 20, Cosmos disclosed that it had entered into a non-binding letter of intent on October 19 with Orisystems shareholders Akil Ahmad Mohammed Ishaq and Othman Ali. The agreement covers the proposed purchase of 510,000 ordinary shares in Orisystems. Akil is set to divest 333,333 shares, representing a 33.33% stake, while Othman will sell 176,667 shares, equivalent to a 17.67% stake.

The total indicative purchase consideration of RM16.524 million will be satisfied through the issuance of 33.048 million new Cosmos shares at an issue price of 50 sen per share. This price reflects a premium of 27.71% above Cosmos’ five-day volume-weighted average market price of 39.15 sen leading up to October 16, the last trading day before the letter of intent was signed.

Cosmos stated that the acquisition would enable the group to immediately access Orisystems’ existing operations, avoiding the need to develop its own operational infrastructure from the ground up. Orisystems is primarily engaged in manufacturing electronic parts and components, including those used in aerospace applications, as well as general trading and product packaging.

As part of the proposed transaction, Orisystems is also subject to a profit guarantee requiring it to achieve a minimum profit after tax of RM3.6 million annually for each financial year ending December 31 in 2027, 2028, and 2029. The company is further expected to deliver a cumulative profit after tax of at least RM10.8 million over this three-year period.

The agreement remains subject to the finalization of definitive agreements and regulatory approvals. Details regarding the timeline and completion of the transaction were not disclosed.