KUALA LUMPUR (Sept 18): Precision machining group YBS International Bhd (KL:YBS) is acquiring the entire stake of Allied Technologies Holdings Pte Ltd’s precision manufacturing services units for a total indicative price of US$38 million (RM167.2 million) via cash and share issuance.
Of the purchase price, US$26 million (equivalent to RM114.4 million) will be satisfied by cash and the remaining US$12 million (equivalent to RM52.8 million) will be satisfied via the issuance of 70.4 million YBS shares, at 75 sen per share, YBS’ bourse filing showed.
The purchase price is almost equal to its market value of RM173 million.
YBS has entered into a memorandum of understanding with Allied Technologies Holdings for the acquisition of the target companies, namely Allied Precision Manufacturing (M) Sdn Bhd (APM), Allied Precision Technologies (M) Sdn Bhd (APTM), Allied Precision (Thailand) Co Ltd (APTC) and Allied Technologies (Saigon) Co Ltd.
These companies provide precision manufacturing services ranging from design and product development prototyping, tool and die fabrication, production and mechanical sub-assembly services to cater to the different needs of their customers who are mainly in the computer and computer peripherals industries.
The target companies have a pool of skilled professionals with the expertise in providing precision manufacturing and mechanical sub-assembly services, said YBS.
“The proposed acquisitions are part of the company’s strategic plan to effectively grow its business by widening its product and service offerings.
“Moving forward, the board believes that the proposed acquisitions will provide greater synergy for business sustainability through the expansion of its customer base in the precision manufacturing industry,” said YBS.
The company added that the acquisitions are expected to contribute positively to the group’s future earnings and growth.
Allied Technologies Holdings is providing a profit guarantee (Ebitda basis) of US$4 million per year for the next two financial years — ending March 31, 2026 and 2027 — of target companies.
YBS’ share price closed down 1.5 sen or 2.2% to 66 sen, bringing the group a market capitalisation of RM173 million.