Digilife Technologies Makes Transformative Move with 51% Acquisition of Brimax AAC Products LLP: Shareholders to Vote on Major Diversification

Key Points at a Glance

• Digilife Technologies Limited (SGX: Catalist) enters agreement to acquire 51% partnership interest in Brimax AAC Products LLP, an Indian manufacturer of modern construction materials.
• The S\$4.9 million acquisition is classified as a “major transaction” and prompts a significant diversification away from Digilife’s legacy IT and telecom businesses.
• Shareholder approval required at an upcoming EGM for both the acquisition and the new business diversification.
• The transaction includes a short-term loan facility of up to S\$0.4 million for Brimax AAC Products LLP.
• Brimax AAC Products LLP operates a newly commissioned plant in Vadodara, India, with annualized revenue potential and assets focused on eco-friendly, autoclaved aerated concrete (AAC) blocks—a sector forecast to grow rapidly in India.
• Digilife’s legacy businesses are being divested, leaving the company with minimal operating activity prior to this move.
• Relative figures under SGX Catalist Rule 1006(b) and (c) are 87.9% and 62.8%, confirming the acquisition’s materiality.
• Post-acquisition, Digilife’s NTA per share drops from 1.10 to 0.89 S\$ cents; LPS rises from 2.70 to 7.57 S\$ cents.
• Brimax AAC Products LLP reported a net loss for the last financial period, but offers significant growth prospects amid India’s construction boom.
• Potentially price-sensitive: The acquisition marks a complete shift in business strategy, risk profile, and growth trajectory for Digilife Technologies.

Full Article: Digilife Technologies Launches Strategic Pivot with Major Stake in Indian Construction Materials Firm

Singapore-listed Digilife Technologies Limited has announced a transformative corporate maneuver—entering into a binding Sale and Purchase Agreement (SPA) to acquire a 51% partnership interest in India’s Brimax AAC Products LLP for a total consideration of INR 336.6 million (approximately S\$4.9 million). This move, subject to shareholder approval at an extraordinary general meeting (EGM), signals a bold pivot from Digilife’s historic focus on IT and telecom into the high-growth construction materials sector.

Acquisition Structure and Immediate Impacts

The transaction involves buying out a majority stake from five Indian partners. In addition to the equity purchase, Digilife, via its wholly-owned subsidiary Modi Aircrete Private Limited, will provide up to INR 25 million (S\$0.4 million) in short-term unsecured loans to Brimax AAC Products LLP, carrying a 6.5% annual interest rate. The company will fund the acquisition entirely through internal resources.

Brimax AAC Products LLP, established in May 2022, operates a 23,515 sqm manufacturing site in Vadodara, Gujarat. The plant, which commenced operations at the start of 2025, has a designed capacity of approximately 600 cubic meters per day of AAC blocks. From January to June 2025, the plant generated revenue of INR 52.9 million (S\$0.8 million). As of June 2025, the company’s net tangible assets stood at INR 306.1 million (S\$4.5 million). However, it posted a net loss of INR 67 million (S\$1.0 million) for the first half of 2025, reflecting ramp-up costs typical of new manufacturing ventures.

Strategic Rationale: Why This Is a Game-Changer for Digilife

• Full Exit from Legacy Sectors: Digilife has already exited its Telecom Business and is in the final stages of exiting the sunset IT Business. This acquisition provides a new operating core as the company would otherwise be left without substantive business activity.
• Entry into High-Growth Indian Construction Market: The Indian construction sector is projected to become the world’s third largest by 2025 and is shifting toward prefabrication and sustainable materials. AAC blocks are gaining traction due to their eco-friendly, lightweight, and energy-efficient properties. The Indian AAC market is forecasted to grow at a 9% CAGR to US\$2.3 billion by 2030, driven by nationwide housing and infrastructure initiatives.
• Operational Control and Expansion Rights: Post-acquisition, Digilife will have majority and operational control of Brimax, setting the stage for rapid scaling and potential forays into related segments such as ready-mix concrete, tiles, steel products, and property development. The SPA also contemplates conversion of Brimax from a partnership into a private limited company, further institutionalizing governance.
• Risk and Reward: The move shifts Digilife’s risk profile dramatically from declining IT/Telecom to a cyclical but high-growth sector, with a footprint in one of the world’s hottest construction markets. Shareholders must weigh short-term financial dilution against long-term strategic potential.

Key Terms and Safeguards

• Conditions Precedent: Completion is contingent upon securing a no-objection from HDFC Bank (Brimax’s primary lender), regulatory approvals (including SGX-ST), and satisfactory due diligence results.
• Security and Guarantees: Existing Indian partners will continue to provide property-backed guarantees for legacy loans, with Digilife not required to provide additional collateral.
• Non-Compete and Non-Solicitation: Sellers are barred from competing or soliciting staff/customers for five years post-exit, protecting Digilife’s interests.
• Completion Adjustments: If actual assets at completion differ by more than 1% from current assets, the purchase price will be adjusted accordingly.
• Board Structure Post-Conversion: After Brimax becomes a private company, Digilife will appoint two out of three directors, ensuring control.

Financial Effects and Shareholder Considerations

• Materiality: The acquisition is classified as a “major transaction” under SGX Catalist rules, with relative figures of 87.9% (net profit/loss basis) and 62.8% (consideration/market cap basis), illustrating the deal’s scale relative to Digilife’s current size and financials.
• Short-Term Dilution: NTA per share will drop from S\$0.0110 to S\$0.0089, and LPS (loss per share) will widen from S\$0.027 to S\$0.0757, reflecting the consolidation of Brimax’s start-up losses. However, these figures do not capture future growth potential or operational synergies.
• Price Sensitivity: The transaction represents a total overhaul of Digilife’s business model and risk profile. If successful, it could catalyze a complete re-rating of the stock, but failure to execute or further operational losses could exacerbate downside risk for shareholders.
• Shareholder Vote Required: Both the acquisition and the business diversification must be approved at an EGM, giving shareholders a direct say in the company’s future direction.
• No Related Party Concerns: The sellers have no shareholding or relationships with Digilife’s directors or major shareholders, reducing conflict of interest risk.

Next Steps and Investor Action

A circular with further details and EGM notice will be sent to shareholders. Shareholders and potential investors are urged to monitor company announcements closely and exercise caution in trading, as the outcome of the EGM and completion of the transaction remain uncertain.

Conclusion: A Defining Crossroads for Digilife Technologies

This acquisition marks a watershed moment for Digilife Technologies—a high-stakes bet on India’s booming construction sector and a decisive step away from its declining legacy businesses. The move is laden with both risk and opportunity, and could fundamentally reshape the company’s long-term prospects. Shareholders’ votes will determine whether Digilife embarks on this new trajectory or remains in search of a new core.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review official company materials, conduct their own due diligence, and consult professional advisers before making any investment decision. No liability is accepted for any loss or damage arising from reliance on the information presented above.

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