Axington Inc : 42U 0% has entered into a conditional sale and purchase agreement (SPA) with Serial I-Tech (Far East) to acquire Achieva Technology in a deal that would result in a reverse takeover (RTO).

Serial I-Tech is is a wholly-owned subsidiary of mainboard-listed Serial Systems : S69 0%, while Achieva is in the business of distribution of information technology, computer peripherals, parts, software and related products in Malaysia. Achieva’s combined net asset value and net tangible assets were at S$3.3 million as at Dec 31, 2021.

Under the SPA, the consideration payable by Axington will be the lower of either a sum of S$27 million, or the valuation ascribed to the sale shares, based on an independent valuation.

Axington, which does not have any revenue-generating business and faces delisting if it does not acquire a new business, said that the proposed acquisition would enable shareholders to participate in business areas that have potential for significant growth.

It added: “The board also believes that the proposed acquisition will have the potential to increase the market capitalisation and widen the investor base of the company, enabling the company to attract more extensive analyst coverage and increase investors’ interest in the company’s securities.“

Aside from having to meet certain conditions, the acquisition is also subject to the approval of the Singapore Exchange, and that of shareholders.

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In July, Axington signed a non-binding memorandum of understanding (MOU) to acquire a 100 per cent stake in food manufacturer Mushan Food Industries and 3 other sister companies. However, the MOU lapsed without the parties entering into an SPA.

Last year, the Catalist-listed company proposed a S$405 million acquisition of a 60 per cent stake in Hong Kong’s Veivo Web Technology. However, that deal eventually fell through.