Ge-Shen acquires 60 pct stakes in ARD, ATSCM for RM13.5 mln

LUMPUR: Ge-Shen Corporation Bhd has entered into a non-binding term sheet to acquire 60 per cent stakes each in Amity Research & Development Sdn Bhd (ARD) and Amity Technical Services & Consultancy (M) Sdn Bhd (ATSCM) for RM13.5 million.

ARD is an engineering and consultancy services provider in the electric and electronics (E&E) industry, while ATSCM is a manufacturer that specialises in printed circuit board assembly, product box building, and cable and wire assembly.

In a filing with Bursa Malaysia, Ge-Shen said the acquisitions will incur a cost of RM13.5 million which will be entirely funded through internally generated funds and bank borrowings.

The proposed acquisition involved purchasing 60,000 shares of ARD and 300,000 shares of ATSCM from the existing shareholders Pak Yue Leong, Tan Chung Ken, Tan Guan Lai, Tan Khay Leang, Tan Kooi Loon and Teh Sheh Chien.

“Upon signing the term sheet, the company is expected to execute the share sales agreement within 60 days, with full payment to be completed within three months following the execution of the agreement,” it said.

The acquisition is expected to be completed by the third quarter of 2024.

Ge-Shen said the purchase justification is based on a price-to-earnings ratio of 4.5 times derived from a minimum profit after tax of RM3.0 million per year for the targeted companies, totalling RM6 million for the guaranteed period of the financial year ending Dec 31, 2024 and 2025.

“This proposed acquisition will expand Ge-Shen’s scale of operations and facilitate the group’s presence in such a market,” it said.