KUALA LUMPUR (July 15): Tomypak Holdings Bhd (KL:TOMYPAK) announced that its wholly-owned subsidiary, Tomypak Flexible Packaging Sdn Bhd (TFP), has exercised a call option to acquire an additional 10% equity interest in EB Packaging Sdn Bhd for RM6.687 million that will raise its shareholding in the latter to 90%.

The option price was determined based on EB Packaging’s profit after tax of RM6.687 million for the 12-month financial period ended Oct 31, 2024, in accordance with the terms of the call and put option agreement signed in June 2023.

TFP manufactures and sells packaging materials, including polyethylene and polypropylene films and sheets for fast-moving consumer goods like powdered beverages, snacks and pet food. EB Packaging specialises in the manufacturing and trading of various plastic packaging materials.

TFP initially acquired a 70% stake in EB Packaging in June 2023 through two conditional share sale agreements with four vendors for RM73.5 million in cash. At the time, TFP also entered the call and put option agreement with three of the vendors to acquire the remaining 30% stake for up to RM31.5 million. A shareholders’ agreement was also signed with the same parties.

The remaining stake was structured into three tranches, with each tranche carrying a maximum purchase consideration of RM10.5 million if EB Packaging met its annual profit targets, or a minimum of RM1 if it recorded losses.

In April 2024, TFP paid RM10.5 million for a 10% stake after EB Packaging achieved an annual profit of RM10.5 million, which raised TFP's ownership to 80% prior to the current transaction.

At Tuesday’s close, Tomypak's shares dipped one sen or 3.5% to 27.5 sen, giving the company a market capitalisation of RM118.56 million.