KUALA LUMPUR (Aug 13): Die-cutting solutions provider CEKD Bhd (KL:CEKD) is venturing into the label printing industry with the acquisition of Shin Fuji Labels Sdn Bhd for RM3 million in cash.

The group signed a conditional share sale agreement on Wednesday with Shin Fuji’s major shareholders — Yap Sing with a 80.7% interest and Yap Teng Wui with a 19.3% stake — to acquire the entire equity interest in the company, according to its filing with Bursa Malaysia. 

Shin Fuji, incorporated in June 2006, is principally involved in the printing and trading of printing materials. Its operations are based in Shah Alam, Selangor, and it currently employs about 28 staff.

For the financial year ended June 30, 2024 (FY2024), Shin Fuji’s profit after taxation (PAT) rose 15.5% to RM827,000 from RM716,000 a year earlier, although revenue declined 19.9% to RM5.6 million from RM7 million.

For the nine months ended Jan 31, 2025, it posted a PAT of RM11.69 million on a revenue of RM3.88 million.

“Through this proposed acquisition, the group expects to tap into new customer segments and growth opportunities,” said CEKD. 

CEKD said the purchase consideration was arrived at on a willing-buyer, willing-seller basis, taking into account Shin Fuji’s unaudited net total assets of RM2.36 million as at end-January 2025 (excluding the value of an investment property and a motor vehicle). 

The acquisition, which is expected to be completed by the third quarter of this year, will be funded through internally generated funds. However, CEKD said it may also use a combination of internally generated funds and bank borrowings to optimise the funding cost, if required. 

As at end-May, CEKD had RM7.38 million in cash and bank balances, and total borrowings of RM1.64 million.

Shares of CEKD closed up one sen or 2.94% at 35 sen on Wednesday, giving the ACE Market-listed company a market capitalisation of RM68.1 million.