Tasco acquires Sabah-based Hypercold
KUALA LUMPUR: Analysts laud Tasco Bhd’s 70 per cent-owned unit, TASCO Yusen Gold Cold Sdn Bhd (TYGC), together with Swi Integrated Logistics Sdn Bhd (SILSB), having proposed to jointly acquire 100 per cent stake in Hypercold Logistics Sdn Bhd for RM21.10 million.
In a filing with Bursa Malaysia, Tasco said both TYGC and SILSB had entered into a conditional share sale agreement with Hypercold for the proposed acquisition.
Under the agreement, the logistics solutions provider said TYGC and SILSB would each acquire 50 per cent stake in Hypercold for RM10.55 million respectively.
To note, Hypercold is involved in the provision of cold chain related logistics, warehouse storage, and transportation of goods. According to the group, Hypercold has the largest cold chain warehouse in Sabah with capacity of 3,000 pallet space and eight temperature-controlled trucks.
On the rationale for the acquisition, Tasco said the company, through TYGC, had established itself as a prominent cold chain logistics provider in Peninsular Malaysia, however, it has no cold chain logistics presence in Sabah or Sarawak.
“By undertaking the proposed acquisition, it will complement TYGC’s existing infrastructure to expand its cold chain logistics services offering to Sabah and Sarawak,” it said.
The jointly acquisition exercise with SILSB would ensure higher take-up rate of Hypercold’s cold chain warehouse and logistics infrastructure, as TYGC would be able to leverage on the wide customer base of SILSB in Sabah and Sarawak.
“Hypercold is a strategic fit to TYGC due to its operational track record of approximately 10 years of servicing the major players in the food and beverage industry in Sabah,” it added.
MIDF Amanah Investment Bank Bhd’s research team (MIDF Research) believes the acquisition will further cement Tasco as the leading cold chain services in Malaysia.
“Tasco’s cold supply chain logistics (CSCL) is currently the largest cold chain provider in Malaysia with estimated 35 per cent market share of the segment with key customers consists of FMCG retailers, F&B players and pharmaceutical groups.
“This represents around 50,000 – 52,000 pallet capacity,” it said in its notes yesterday.
“Its biggest cold storage warehouse is in Shah Alam with pallets capacity of 26,000 with built-up area of 330,000 sq. ft.
“Other locations include Pulau Indah, Port Klang and Bukit Raja. With additions of Hypercold, Tasco capacity will increase to approximate of 53,000 – 56,000 pallet capacity.”
MIDF Research said it applied conservative assumptions on the impact of earnings forecast from this acquisition.
“Our estimates follow the parameters of historical precedent with single digit revenue growth for Hypercold and high double digit profit margin for the target company. We are revising our earnings to RM41.4 million and RM46 million for FY21 and FY22.”