Tomypak Holdings Berhad (Tomypak), one of the leading converters for flexible food packaging in Malaysia, is pleased to announce that its shareholders have approved the acquisition of EB Packaging Sdn Bhd (EB Packaging).
It was greenlighted at the ordinary resolution at its extraordinary general meeting yesterday (Oct 11).
The approved resolution by shareholders of the group is for the proposed acquisition of 70% shares in EB Packaging by Tomypak Flexible Packaging Sdn Bhd (TFP), a wholly-owned subsidiary of Tomypak.
The call and put options for the remaining 30% equity interest of EB Packaging. The total cash consideration for the acquisition and options are RM73,500,000 and a maximum of RM31,500,000 respectively.
The company said this strategic expansion via the acquisition of a prominent and well-established player in the flexible plastic packaging sector, aligns with the group’s strategy centered on bolstering the revenue and profitability of the group.
“By doing so, we aim to expand our footprint vertically within the flexible plastic packaging sector. This decision is rooted in the recognition that our Group and EB Packaging both cater to different customer bases,” it said in a statement today.
The company added that its customers are predominantly food and beverage manufacturers while EB Packaging engages with a diverse clientele including industries like food, electronics, industrial packaging and building materials.
“This diverse customer base presents a unique opportunity for mutual growth and synergy, capitalizing on each other’s strengths, brand identities, and track records.
“Furthermore, through the consolidation of cost synergies, covering the procurement of raw materials and common support services by both EB Packaging and our Group, we aim to achieve significant cost reductions and improvements in operational efficiency in the enlarged Group as a whole.”
The company added that with the acquisition, the group minimizes its exposure to potential risks associated with EB Packaging’s financial performance.
“Meanwhile, the promoters will continue to manage EB Packaging’s business for an additional three years.
“Their expertise and commitment can help maintain and potentially enhance the performance of EB Packaging, which will benefit the shareholders of the group by ensuring business and management continuity,” the company said.
It added: “EB Packaging’s consistent profitability over the past three financial years underscores its suitability as a strategic fit for our Group’s next chapter of growth. The acquisition is expected to contribute positively to the future earnings and cash flows of our enlarged group.”