KUALA LUMPUR (July 3): Pipe manufacturer YLI Holdings Bhd (KL:YLI) is acquiring an 80% stake in a company that supplies chemicals and assembles water and electric meters.

The group is acquiring the stake in Damini Corporation Sdn Bhd from Bumiraya Armani Sdn Bhd for RM10 million, said YLI in a bourse filing on Wednesday.

“The proposed acquisition is expected to create synergistic benefits to complement YLI’s pipe business by expanding its range of products and services offering to include the assembly and trading of water and electric meters as well as chemicals for its waterworks and sewerage customers.

"YLI and the Damini Group will be able to cross-sell each other’s product offerings to their existing and new customers which will allow the group to bid and tender for larger projects as a ‘one-stop solution provider’ with more competitive product mix and pricing," added YLI.  

The group said it will pay RM3.5 million in cash, with the balance RM6.5 million via the issuance of 10 million new YLI shares at 65 sen per share.

The share issue price represents a premium of four sen or 7% over YLI’s five-day volume-weighted average market price up to July 2.

YLI’s shares closed unchanged at 60 sen for a market capitalisation of RM61.7 million. Year to date, the counter has gained 50%.