Datasonic gets Innov8tif — 3rd buyer in 2 years aims 4 profitability

A deal signed Monday gives Datasonic Group Bhd a 51 percent stake in Innov8tif, and with it a strong position to provide services throughout the identity assurance lifecycle, both in-person and online, including fingerprint, face and iris biometrics.

Datasonic will pay Innov8tif parent Revenue Group 40 million Malaysian ringgits (approximately US$9.1 million) in the deal, which also includes a profit guarantee. Innov8tif is obligated to clear RM2.5 million ($570,000) in profit in the financial 2025 year and RM3 million ($686,000) in 2026, according to a regulatory disclosure. The final RM2.75 million of the purchase price is dependent on meeting the profit targets.

Innov8tif had issued RM60.5 million ($13.8 million) in share capital as of October 15, 2024.

The filing refers to a handful of patents held by Innov8tif, and the company’s core capabilities in low-code digital ID assurance, ID proofing for KYC and KYB checks, identity verification and mobile biometrics for customer onboarding and authentication.

Datasonic has built its business around supplying identity and security documents, biometric equipment and access control gates, primarily to the Malaysian government.

“As such, the Proposed Acquisition would allow Datasonic to immediately acquire a comprehensive addition of AI-based tools in its production and enhance its technology,” according to the disclosure.

Deals with the Malaysian government include a contract recently awarded to issue biometric ID cards to foreign workers. Outside of its home base, Datasonic’s contracts include one to help Guinea introduce a biometric land management system, signed in late-2022.

Innov8tif recently signed a deal with Taiwan-based Toppan iDGate to provide digital identity tools and liveness detection to financial institutions in the APAC region.

Datasonic may also utilize Innov8tif’s digital ID technology to develop a business-to-consumer (B2C) biometrics business for applications like customer onboarding, credit scoring and fraud prevention.

The companies expect the acquisition to be finalized during the second quarter of 2025.

A hot potato

The acquisition is the third in two years for Malaysia-based Innov8tif.

Innov8tif was acquired by Revenue Group a year and a half ago for RM36 million (approximately $8 million at the time), just months after a controlling interest was acquired by Hong Seng for RM30.8 million ($6.85 million). In each case a 51 stake changed hands. At that time, Innov8tif had just announced its acquisition of digital onboarding and user authentication provider Xendity from Green Packet in a RM17.5 million ($4.1 million) merger.

Xendity is included in the latest transaction, and the combined entity reports revenues of RM18.24 million ($4.2 million) from January 18, 2023, when it was incorporated in Malaysia, to August 31, 2024. During the period, it lost RM910,000 ($208,000) after tax, lending some suspense to the profit condition.

Article Topics

acquisitions  |  biometrics  |  Datasonic  |  digital ID  |  Innov8tif