KUALA LUMPUR (Aug 28): Farm Fresh Bhd (KL:FFB) said it will acquire an additional 20% stake in ice cream chain The Inside Scoop Sdn Bhd (TISSB) for RM50.8 million.
The acquisition follows TISSB co-founder Edmund Tan’s exercise of a put option requiring Farm Fresh to acquire his 174,618 shares in TISSB.
Upon completion of the acquisition, Farm Fresh’s stake in TISSB will increase to 85% from 65%, while Tan’s stake will be reduced to 15%.
To recap, Farm Fresh first acquired a 65% stake in TISSB in 2023 for RM83.9 million through a combination of cash and shares as it sought to expand beyond its core dairy business.
The transaction involved buying a 53% stake from existing shareholders and subscribing for new shares that gave Farm Fresh an additional 12% stake.
As part of the agreement, Farm Fresh granted Tan a put option to require the group to purchase his remaining shares in TISSB.
TISSB was co-founded by Tan and his wife, Lim Shiew Li, in 2013. The company operates the home-grown artisanal ice cream chain Inside Scoop, which currently has more than 70 outlets nationwide.
Farm Fresh said the RM50.8 million purchase consideration was determined based on a pre-agreed formula under the shareholders agreement dated May 31, 2023.
The group said the acquisition will be funded through a combination of internally generated funds, bank borrowings and other fundraising avenues available to the group.
Shares of Farm Fresh rose three sen, or 1.5%, to RM2.05 at the time of writing, giving the group a market capitalisation of RM3.86 billion.