KUALA LUMPUR (Sept 2): Integrated construction engineering group Vizione Holdings Bhd is planning to acquire a 51%-stake in specialty medical gloves maker SSN Medical Products Sdn Bhd for RM5 million, cash, to venture into the glove-making sector.
Vizione's wholly-owned VIP Index Sdn Bhd has today inked a Heads of Agreement (HoA) with the vendors Ang Teck Leong, Lim Kiat Yee and Ravendran A/L Uthrapathy for the proposed purchase.
SSN manufactures both latex and nitrile medical gloves, latex condoms, as well as specialty gloves such as elbow length medical gloves, Vizione said in a statement. About 80% of its products are exported overseas, mainly to the US, Germany, China and other European countries.
With operations located in Seri Kembangan, Selangor, SNS has nine manufacturing lines with a total capacity of more than 500 million gloves per annum. “SSN is also exploring new opportunities in other high value-added medical disposables,” Vizione said.
“We are excited with the potentials arising from the proposed acquisition of SSN. I understand our shareholders may think we are jumping onto the gloves bandwagon. However, after conducting studies on the expected demand growth for gloves and understanding the operations of SSN, we are convinced this is a very viable business with good returns,” said Vizione managing director Datuk Ng Aun Hooi.
He stressed that Vizione is proposing to buy a business that has been in operations since 1997, with existing customers and an established supply chain network.
“Moreover, besides the usual latex and nitrile medical gloves, SSN has also successfully carved a niche market-producing specialty gloves such as elbow length latex medical gloves, as well as gloves for gynecology use and gloves for chemotherapy use. In addition to serving as an original equipment manufacturer or OEM, SSN also has its own brand called ‘Hanser’," Ng said.
He added that Vizione plans to add more production lines to boost SNS' capacity to 1 billion gloves per annum from 500 million now, to unlock the full potential of SSN. "SSN will be a new income stream for the group that is recurring in nature, thus providing enhanced visibility to our existing construction earnings,” Ng added.
Vizione plans to fund the proposed acquisition using internal funds and bank borrowings.
The group's shares closed half a sen or 1% higher at 50.5 sen today, giving Vizione a market capitalisation of RM382.18 million. Over the past year, the counter has fallen 43.6% from 89.5 sen.
Edited by Tan Choe Choe
http://www.theedgemarkets.com/article/vizione-buy-controlling-stake-specialty-medical-gloves-maker
