The Malaysian government is exploring a potential acquisition of Datasonic Technologies Sdn Bhd, a wholly-owned subsidiary of NexG Bhd. Datasonic Technologies is the exclusive supplier of Malaysia's international passports and MyKad. NexG has provided an indicative price of RM7.5 billion for Datasonic Technologies, based on a preliminary internal sum-of-parts assessment. This valuation significantly exceeds NexG's current market capitalization of about RM1.04 billion to RM1.23 billion, being more than six times its value.
NexG emphasized that this RM7.5 billion valuation is a preliminary internal assessment and not an independent valuation, an agreed price, or a firm offer. The valuation considers Datasonic's valuable intellectual property, including patent-pending biometric QR citizen verification flow and copyright applications for MyKad and passport designs. Additionally, Datasonic has committed investments of approximately RM1.9 billion for the national identity program, covering personnel, equipment, system upgrades, and two manufacturing plants in Petaling Jaya and Meru.
Datasonic Technologies is NexG's core operating business and its primary revenue and earnings contributor. A disposal would leave NexG without its main business. The subsidiary holds active contracts with the Home Ministry worth approximately RM2.74 billion, including supplying passport booklets, polycarbonate biodata pages, raw cards, and consumables for national identity cards until May 2032. NexG stated that any potential transaction must reflect a fair value, ensure equal treatment of all shareholders, and preserve the security and continuity of the national identity capability.
NexG has clarified that no decision has been made to proceed with any transaction, and no agreement has been reached with the government regarding the acquisition. The company intends to allocate part of any proceeds from a potential sale towards a dividend, with the amount contingent on the final transaction value. The government also requested assessments on potential compensation for terminating the MyKad supply contract and indicative pricing to acquire a controlling stake in NexG. The potential buyout follows a boardroom dispute at NexG earlier in the year.
