Malaysian state-owned private equity firm Ekuiti Nasional Bhd (Ekuinas) has exited its investment in Tranglo Sdn Bhd (Tranglo), a cross-border mobile transaction gateway company, by selling its 60 per cent stake to Hong Kong-based financial services firm TNG.
In a statement, Ekuinas said it has divested its entire equity interest in Tranglo to TNG for MYR114.9 million ($27.6 million), marking the state-owned PE firm’s ninth exit so far, generating proceeds of more than MYR2 billion ($480 million).
The divestment gives Ekuinas an internal rate of return of 26.8 per cent and money multiple of 1.96 times the capital invested.
Founded in 2008, Tranglo operates a global money and digital credit hub that enables “easy and instant” transfer to friends or family. It currently facilitates airtime transfer and money remittance including in Southeast Asia, Hong Kong, and mainland China.
“Tranglo successfully grew its money remittance volume by 15-fold since acquisition. We are confident that Tranglo will continue its strong performance over the mid-term,” Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said.
Syed Yasir Arafat added that the selection of TNG was made after a rigorous sale process that attracted global interest from several parties.
“It was done on a merit-based process, where capability, resource, and alignment with management’s vision were equally as important as price. We want to ensure that the next partner would further catalyse the business,” he said.
The buyer, TNG, is considered as 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.
It was in 2015 when Ekuinas bought majority stakes in Tranglo for MYR54 million ($13 million), marking its maiden investment in the technology, media, and telecommunications (TMT) industry.
The fund said the TMT industry is becoming “increasingly competitive”, driven by disruption from new fintech entrants.
“As such, the decision to divest was based on several considerations: 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,” it said in a statement.
Early this year, Ekuinas divested its entire stake in local education company APIIT Education Group for $180 million to a joint venture vehicle owned by its existing management team and private equity firm KV Asia Capital.
Ekuinas had invested in APIIT in 2011, buying a 51 per cent stake from Sapura Resources Bhd and in 2016 took over the remaining 49 per cent. Last year, APU launched its state-of-the-art campus in Technology Park Malaysia as part of a value creation plan for the group.