FoundPac acquires 70% stake in cable and connectors manufacturer for RM8m
KUALA LUMPUR (Sept 6): Penang-based precision engineering firm FoundPac Group Bhd (FPG), via its wholly-owned subsidiary FoundPac Capital Sdn Bhd, has inked a conditional share sale agreement to acquire a 70% stake in SDKM Technologies Sdn Bhd for a cash consideration of RM8.4 million.
In a local bourse filing today, the group said it acquired the shares from SDKM’s two major shareholders, Ng Phaik Lee and Kameda Shin, and said that upon completion of the acquisition, SDKM will become a 70% subsidiary company of FPG.
According to the group, SDKM's principal business is the manufacture and sale of accessory cables and connectors, AC sockets, optical digital cables, security intercom, elevator interphones and TV door phones.
“The proposed SDKM acquisition is an opportunity for FPG Group to venture into the market of wire and cables. Concurrently, the group may also cross-sell its products to SDKM’s customers.
“The group’s long-term growth plan includes growing its semiconductor business as well as expanding its business portfolio into other viable and income-generating businesses.
“In view of the promising prospects of SDKM and the electrical and electronic (E&E) sector, the board reasonably believes that the business of SDKM is an attractive business proposition,” it said.
The group added that upon acquisition, FPG and SDKM may leverage each other’s customer base to increase their revenues.
It also highlighted that FPG will also leverage SDKM's current and prospective customer base and network to seek business synergies between its manufacturing segments and cross-selling opportunities in the enlarged group.
“Leveraging on improving SDKM’s financial results and the upcoming potential business opportunities of SDKM, the board is optimistic that the prospects for the coming years would be positive.
“Henceforth, the board envisages that the proposed SDKM acquisition will contribute to the future earnings and growth of the FPG Group,” it noted.
FPG and its subsidiaries are currently organised into business units based on products and services and provide precision engineering solutions, laser stencils and automation services.
Shares in FPG closed 3.5 sen or 4.58% higher at 80 sen, giving it a market capitalization of RM431.04 million. Year to date, the stock has fallen by 14.89%.
http://www.theedgemarkets.com/article/foundpac-acquires-70-stake-cable-and-connectors-manufacturer-rm8m
