KUALA LUMPUR (Jan 16): Econframe Bhd has acquired industrial property builder ETA World Sdn Bhd for a purchase consideration of RM56 million.
In a statement on Monday, the total door system solutions provider said it has entered into a conditional share sale agreement with ETA Industries Sdn Bhd for the proposed acquisition.
According to the group, ETA World provides turnkey design and build solutions of industrial buildings such as factories and warehouses, customising each project based on its customers’ requirements and specifications.
“This proposed acquisition brings excitement to the group as it enables us to tap into ETA World’s expertise in the construction and property development of industrial properties, enabling the enlarged group to take advantage and ride on the favourable prospects of the industrial property market.
“Looking ahead, the growth in Malaysia’s manufacturing sector presents significant opportunities. This is driven by the ongoing trade tensions between the US and China, which has led to the diversification of supply chains among several multinational companies, leading to higher demand for industrial properties, such as factories and warehouses in Malaysia,” said Econframe group managing director Lim Chin Horng.
The group intends to fund the acquisition via a combination of cash and issuance of shares, of which RM28.1 million is to be satisfied in cash and the remaining RM27.9 million via the issuance and allotment of 30 million new ordinary shares in Econframe.
According to Econframe, the acquisition comes with a profit guarantee that ETA World shall achieve an audited profit after tax (PAT) of not less than RM10 million each year for three years, and a cumulative audited PAT of not less than RM30 million.
In tandem with the acquisition, the group also announced the proposed diversification of Econframe into construction services and property development, which includes the design, build and sale of industrial properties.
It highlighted that the proposed acquisition and diversification is expected to complete in the first half of 2024.
Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!
Source: EdgeProp.my
POST YOUR COMMENTS