KUALA LUMPUR: Home appliances maker and distributor, Khind Holdings Bhd, is paying S$2.8 million (RM6.82 million) for a Singapore-based home appliances retailer-cum-distributor and its unit to grow its presence in the city-state.
In a statement to Bursa Malaysia yesterday, Khind said it had entered into a conditional sale and purchase agreement (SPA) with Singapore-based Chiang Hong Pte Ltd to acquire 100% of Mayer Marketing Pte Ltd (MMPL) and the latter’s 50%-owned associate Mayer Marketing Sdn Bhd (MMSB), which is incorporated in Brunei.
Both companies, collectively known as the MMPL group, are involved in marketing, distributing and retailing electrical products, household goods and home appliances.
“The proposed acquisition will provide a direct opportunity for Khind to participate in retailing business, to expand vertically into Singapore’s high-end retail market and to bring a synergistic effect products line-up via retail stores,” Khind said.
According to Khind, the S$2.8 million purchase consideration was based on the MMPL group’s adjusted unaudited net assets of S$2.31 million as at Oct 31, 2011, and future prospects. The adjustment was for a S$5 million waiver of vendor loans. For the year ended Dec 31, 2011, net profit for MMPL stood at S$430,000 while MMSB’s stood at RM80,000.
Among other things, the SPA includes a compensation clause, which in effect guarantees that MMPL achieves a minimum consolidated net profit of S$400,000 in FY ended Dec 31, 2011. Khind would be paid a sum equal to any shortfall in the actual net profit to the targeted amount of S$400,000.
Upon completion of the deal, the MMPL group shall employ a Chiang Hong director, Tan Gek Gnee, as executive manager for at least three months at a salary of S$6,000 per month.
Khind said it was optimistic on the outlook for Singapore’s household appliances industry, especially prospects of premium brand products, but did not disclose plans for the Brunei unit.
It currently derives the bulk of earnings from Malaysia, and has been selling its products in Singapore, the Middle East, Europe, African region and other parts of Asia.
Khind expects the proposed acquisition to be completed by March this year.
Its shares, which last closed at RM1.45, were untraded yesterday.
In a statement to Bursa Malaysia yesterday, Khind said it had entered into a conditional sale and purchase agreement (SPA) with Singapore-based Chiang Hong Pte Ltd to acquire 100% of Mayer Marketing Pte Ltd (MMPL) and the latter’s 50%-owned associate Mayer Marketing Sdn Bhd (MMSB), which is incorporated in Brunei.
Both companies, collectively known as the MMPL group, are involved in marketing, distributing and retailing electrical products, household goods and home appliances.
“The proposed acquisition will provide a direct opportunity for Khind to participate in retailing business, to expand vertically into Singapore’s high-end retail market and to bring a synergistic effect products line-up via retail stores,” Khind said.
According to Khind, the S$2.8 million purchase consideration was based on the MMPL group’s adjusted unaudited net assets of S$2.31 million as at Oct 31, 2011, and future prospects. The adjustment was for a S$5 million waiver of vendor loans. For the year ended Dec 31, 2011, net profit for MMPL stood at S$430,000 while MMSB’s stood at RM80,000.
Among other things, the SPA includes a compensation clause, which in effect guarantees that MMPL achieves a minimum consolidated net profit of S$400,000 in FY ended Dec 31, 2011. Khind would be paid a sum equal to any shortfall in the actual net profit to the targeted amount of S$400,000.
Upon completion of the deal, the MMPL group shall employ a Chiang Hong director, Tan Gek Gnee, as executive manager for at least three months at a salary of S$6,000 per month.
Khind said it was optimistic on the outlook for Singapore’s household appliances industry, especially prospects of premium brand products, but did not disclose plans for the Brunei unit.
It currently derives the bulk of earnings from Malaysia, and has been selling its products in Singapore, the Middle East, Europe, African region and other parts of Asia.
Khind expects the proposed acquisition to be completed by March this year.
Its shares, which last closed at RM1.45, were untraded yesterday.
