KUALA LUMPUR (Dec 27): Techbond Group Bhd is spending RM57.25 million cash to acquire a company that produces adhesives and its related chemicals under the business empire of tycoon Robert Kuok.

The industrial adhesives producer entered into an agreement to buy a 99.57% stake in Malayan Adhesives and Chemicals Sdn Bhd (MAC) from Chemquest Sdn Bhd, which is 55% owned by PPB Group Bhd and 45% owned by Kuok Brothers Sdn Bhd.

Techbond, which is 72% controlled by managing director Lee Seng Thye via his private vehicle Sonicbond Sdn Bhd, intends to make several offers to acquire the remaining 0.43% stake in MAC from minority shareholders, namely Melina Mahmood, Amanah Raya Bhd (administrator for estate of Mohamed Yakin Long) and Datuk Musa @ Ayob Saad.

The acquisition is in line with the group's long-term strategy to expand its products and geographical reach, which is expected to enhance its standing as an adhesives and sealant manufacturer globally, said Techbond in a stock exchange filing on Tuesday (Dec 27).

Techbond, whose cash and cash equivalents stood at RM35.27 million as of end-September, said the acquisition will be funded through a combination of internally generated funds and bank borrowings.

The acquisition, which is expected to be completed by the first quarter of 2023, is subject to Techbond shareholders' approval via an extraordinary general meeting and Kenanga Investment Bank Bhd has been appointed as principal adviser for the transaction.

Shares of Techbond closed one sen or 2.63% higher at 39 sen on Tuesday, giving it a market capitalisation of RM206.46 million.