V.S. Industry Berhad has entered into a Share Sale Agreement (SSA) with Tan Eng Kwee and Yeo Teck Hoe to acquire 2,200,000 ordinary shares in HT Press Work Sdn. Bhd. (HTPW) representing 11% equity interest, for a total consideration of RM2.6 million.
This is additional to the 40%-stake in HTPW that VS first acquired back in May 2023. As such, VS will hold a total of 51%-interest in HTPW upon completion of the Proposed Acquisition, effectively turning the latter into a subsidiary of the Group.
HTPW is a specialist in metal stamping, tools and die design and fabrication, machining as well as anodizing and surface finishing of aluminium product with more than 28 years of track record. Its manufacturing facility is located in Kulai, Johor and serves a wide array of customers such as home appliances, consumer electronics and etc.
Managing Director of VS, Datuk S.Y. Gansaid, “We are increasing our stake in HTPW to turn it into a subsidiary of the Group via this Proposed Acquisition. This is a synergistic acquisition as we will be able to leverage on HTPW’s expertise to enhance our value chain within the tools and die design and fabrication, machining and surface finishing division. Ultimately, this would broaden our manufacturing services offerings and further strengthen our position as a vertically integrated electronics manufacturing services provider.”
As part of the SSA of the Proposed Acquisition, VS and the Vendors have established that in the event HTPW achieves the profit target (excluding non-operating gains or losses) for any financial year before 31 December 2025 of a profit after taxation (PAT) of RM20.0 million based on the audited financial statement for the relevant financial year, VS will pay a premium equivalent to the Purchase Consideration, i.e., RM2.6 million, to the Vendors.
“The Premium serves as an incentive for the Vendors, which aligns with the Group’s interest to further unlock the potential of HTPW. VS will also tap on our vast experience and wide network to fully realized the potential of HTPW. Looking ahead, the outlook of the Group continues to be promising on the back of sustained uptick in sales orders. At the same time, backed by our strong balance sheet, VS remains on the lookout for any good business opportunities that arise,” Datuk S.Y. Gan further added.
Subsequent to the completion of the SSA, the Vendors, have offered a call option for 1,800,000 ordinary shares (“Option Shares”), representing 9% equity interest in HTPW to VS (“Proposed Call Option”), which may be exercised:
- If HTPW achieves the Profit Target during any financial year on or before 31 December 2025; or
- If HTPW fails to achieve the Profit Target by 31 December 2026.
The price for each Option Shares will be calculated based on 5 times of the PAT, divided by the total number of shares in the issued capital of HTPW.
The Proposed Acquisition is expected to be completed by 31 October 2023 barring any unforeseen circumstances.
