KUALA LUMPUR: Boustead Holdings Bhd’s wholly-owned unit yesterday paid its major shareholder, Lembaga Tabung Angkatan Tentera (LTAT), RM4.5 million or 1.25 times book for a 30% stake in paint-maker Boustead Sissons Paints Sdn Bhd (BSP).
The acquisition by the 100%-unit, Boustead Building Materials Sdn Bhd (BBM), is part of Boustead Holdings’ strategic intent to develop and build a range of building materials businesses under BBM, the company said in a statement yesterday.
Boustead Holdings is also transferring its 70% stake in BSP to BBM for RM10.5 million, valuing 100% of BSP at RM15 million or 1.25 times BSP’s net asset value of RM12.01 million. The purchase consideration also took into consideration of BSP’s future earnings potential.
With 100% of BSP under BBM, the latter can benefit from synergies and cost savings achieved from better economies of scale due to the complementary nature of their businesses, Boustead Holdings said.
That, in turn, is expected to improve BBM’s profitability, it added. “The acquisition also enables BBM to have additional source of income stream in the paint manufacturing business,” the company said.
The acquisition is not expected to materially impact Boustead Holdings’ earnings for FY ending Dec 31, 2011, and does not require any approvals.
This article appeared in The Edge Financial Daily, December 29, 2011.
The acquisition by the 100%-unit, Boustead Building Materials Sdn Bhd (BBM), is part of Boustead Holdings’ strategic intent to develop and build a range of building materials businesses under BBM, the company said in a statement yesterday.
Boustead Holdings is also transferring its 70% stake in BSP to BBM for RM10.5 million, valuing 100% of BSP at RM15 million or 1.25 times BSP’s net asset value of RM12.01 million. The purchase consideration also took into consideration of BSP’s future earnings potential.
With 100% of BSP under BBM, the latter can benefit from synergies and cost savings achieved from better economies of scale due to the complementary nature of their businesses, Boustead Holdings said.
That, in turn, is expected to improve BBM’s profitability, it added. “The acquisition also enables BBM to have additional source of income stream in the paint manufacturing business,” the company said.
The acquisition is not expected to materially impact Boustead Holdings’ earnings for FY ending Dec 31, 2011, and does not require any approvals.
This article appeared in The Edge Financial Daily, December 29, 2011.
