KUALA LUMPUR (Oct 1): Custom Food Holding Bhd, a food ingredient maker backed by private equity firm Creador, is planning an initial public offering on the Main Market of Bursa Malaysia.

The proposed listing is to raise funds to finance its new manufacturing facility, repay borrowings and use as working capital. Creador, the private equity backer of listings such as CTOS Digital Bhd (KL:CTOS) in 2020, Mr DIY Group (M) Bhd (KL:MRDIY) in 2021 and, more recently, Eco-Shop Marketing Bhd (KL:ECOSHOP) in May this year, currently has an effective 16.7% stake in Custom Food.

The planned IPO will involve a public issue of 113.31 million new shares, representing 11.1% of its enlarged issued shares, and an offer for sale of 186.81 million existing shares, representing 18.3%, according to Custom Food's draft prospectus filed on Thursday. Altogether, the IPO offers the public a 29.4% interest in the company.

The retail offering will involve 30.62 million shares at a price to be determined — with 20.42 million shares set aside for the Malaysian public and 10.21 million shares for eligible persons — while the institutional offering will involve 269.5 million shares.

Proceeds from the sale of 186.81 million existing shares will accrue to the selling shareholders, Oriental Concept Sdn Bhd (OCSB) and Sabroso Group Sdn Bhd (SGSB). Post-IPO, OCSB’s stake will reduce to 61.21% (assuming the overallotment option is fully exercised) from 80% while SGSB’s stake will reduce to 4.98% from 20%.

OCSB is controlled by its managing director, Datuk Saw Beng Liang, his sibling Saw Benson and their father Saw Ee Chee. SGSB is controlled by Polvere Group Sdn Bhd, an indirect 83.5% subsidiary of Creador V LP, a fund managed by Creador.

Custom Food is principally a manufacturer of speciality food ingredients and food products, focusing on non-dairy creamers and functional lipid powders as well as malt and cereal products. The company has manufacturing facilities in Kulim, Kedah, and Perai, Penang.

The company made a profit after tax (PAT) of RM42.07 million on a revenue of RM394.86 million in the financial year ended Dec 31, 2024 (FY2024), with a PAT margin of 10.65% — up from 8.77% in FY2023 and 9.4% in FY2022.

RHB Bank is the sole principal adviser, bookrunner and underwriter for the IPO.