KUALA LUMPUR (Jan 7): KUB Malaysia Bhd (KL:KUB) is acquiring a building materials company from CI Holdings Bhd (KL:CIHLDG) in a related party transaction deal for RM20 million cash, as part of the group's strategy to broaden its revenue base.
In a filing with Bursa Malaysia on Tuesday, KUB said its wholly owned subsidiary Central Cables Bhd (CCB) had entered into a share sale agreement with CI Holdings, being the sole shareholder of the target company, Doe Industries Sdn Bhd.
JAG Capital Holdings Sdn Bhd, the investment vehicle of Plantation Industries and Commodities Minister Datuk Seri Johari Abdul Ghani, is the largest shareholder in both KUB (62.8%) and CI Holdings (32.9%).
Johari's son Amir Nashrin Johari is a non-independent non-executive director of KUB and a director of CCB. He is also an executive director of CI Holdings and a director of Doe Industries.
Meanwhile, CI Holdings chairman Megat Joha Megat Abdul Rahman is also a non-independent non-executive director of KUB.
Following the acquisition, Doe Industries will be a wholly owned subsidiary of CCB.
KUB said Doe Industries' building materials business, which includes the manufacturing of water taps, showers and other plumbing fittings, ceramic sanitary wares, household fittings and appliances, as well as trading of sanitary wares, will integrate well with CCB's existing cables and wires operations.
"By leveraging Doe Industries’ established product range and extensive distribution network, CCB will be able to strengthen its competitive position, delivering a distinctive and appealing value proposition to its customers, particularly property developers and contractors," it said.
"Following the proposed acquisition, the enlarged CCB group is also positioned to further enhance its product offerings, with the long-term objective of establishing a comprehensive, one-stop centre for building material solutions," KUB added.
Barring any unforeseen circumstances, the proposed acquisition is expected to be completed in the first quarter of 2025.
On Tuesday's market close, shares of KUB were down half a sen or 0.73% at 68 sen, while CI Holdings were up 10 sen or 3.92% at RM2.65.