12/10/2018 – Malaysian state-owned private equity firm Ekuiti Nasional Berhad (Ekuinas) has today sold its 60 percent stake in Tranglo Sdn Bhd, a cross-border mobile transaction gateway company.
The deal sees Ekuinas divesting its entire equity interest in Tranglo to Hong Kong-based digital wallet platform operator TNG for MYR114.9 million, which translates to about US$27.6 million.
Tranglo was the PE firm’s first investment in the technology, media, and telecommunications (TMT) industry three years ago, having initially purchased its majority stakes for MYR54 million (about US$13 million).
Now, this divestment marks the company’s ninth exit, generating a total realisation of proceedings worth more than MYR2 billion (about US$480 million). This also gives Ekuinas an internal rate of return (IRR) of 26.8 percent and money multiple of 1.96 times the capital invested.
Since acquiring Tranglo, Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said, “in terms of performance, Tranglo successfully grew its money remittance volume 15-fold since acquisition. We are confident that Tranglo will continue its strong performance over the mid-term,”
Tranglo was set up in 2008 and serve as a global money and digital hub that enables easy and instant transfer to friends or family. It currently facilitates airtime transfer and money remittance services covering Southeast Asia, Hong Kong, and mainland China.
The fund said the decision to divest is because the increasingly competitiveness of the TMT industry, driven by the disruption of new fintech entrants.
“There are several considerations to divest,” said Ekuinas. “Firstly, that it would be in line with Ekuinas’ strategy to continue crystallising its assets when the time and economic climate are right. Secondly, to identify a strategic partner that would be able to push the business into its next phase of growth.”
The divestment of Tranglo was made after a rigorous sale process that attracted global interest from various parties.
“It was done on a merit-based process, where capability, resource, and alignment with management’s vision were equally as important as price,” said Syed Yasir Arafat. “We want to ensure that the next partner would further catalyse the business.”
The final decision of TNG as the buyer was considered as it is the only financial services enabler for the 1.2 billion unbanked pan-Asian population across Hong Kong and 12 countries.
Its flagship e-wallet application in Hong Kong, TNG Wallet, was launched in November 2015 and has since become one of the most popular e-wallets in the region.
Early this year, Ekuinas also divested its entire stake in local education company APIIT Education Group for US$180 million to a joint venture vehicle owned by its existing management team and private equity firm KV Asia Capital.
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Ekuinas said the divestment translates to an IRR of 26.8 percent and money multiple of 1.96 times the capital invested.
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