KUALA LUMPUR (May 2): Harrisons Holdings (Malaysia) Bhd plans to venture into the retail business in Singapore through the acquisition of the Famous Amos cookies business there for S$5.7 million.
Harrisons said it plans to acquire its second major retailing concept after the recent acquisition of Watts Harrisons Sdn Bhd, which retails and wholesale the uniform price products under the Komonoya brand in Malaysia, Singapore and Brunei.
"Harrisons plans to expand to other regional territories with this established brand (Famous Amos) together with the Komonoya brand," it added.
In a filing with Bursa Malaysia today, Harrisons said its indirect 51%-owned subsidiary Famous Food Co Pte Ltd (FFC) has on April 30 entered into a Memorandum of Understanding (MoU) with Shiak Esa Taha Mattar and Yeo Geok Choe to acquire Famous Amos Chocolate Chip Cookie Singapore Pte Ltd (Amos), which is in the business of retailing cookies under the Famous Amos brand name in Singapore.
It noted that the Famous Amos business has been established in Singapore since 1983 and has been profitable.
"This acquisition will further enable the company to capitalise on its overseas expansion platform to further expand its distribution and wholesaling business," it added.
The purchase price of S$5.7 million was based on the price/earning ratio (PER) of 7.85 times. The audited net profit of Amos as at Sept 30, 2017 was S$726,319, while its net tangible assets (NTA) stood at S$7.59 million.
The expected NTA upon completion of the purchase is expected to be S$3.41 million subject to due diligence and the terms and conditions of the sale and purchase agreement (SPA).
Harrisons said its 51% share of the proposed transaction amounts to S$2.91 million, which will be funded through bank borrowings.
Barring any unforeseen circumstances, it expects to complete the proposed acquisition within three months from signing the SPA.
Harrisons shares closed unchanged at RM4 today, bringing it a market capitalisation of RM273.9 million.