KUALA LUMPUR (Sept 9): Mikro MSC Bhd (KL:MIKROMB) is planning to acquire a full equity stake in Broadguard Sdn Bhd (BSB) for RM30 million to expand its reach within the electrical and electronics ecosystem.

In a bourse filing on Wednesday, Mikro will issue 51.72 million new shares, which is about 4.28% of Mikro’s enlarged share base, at an issue price of about 58 sen apiece to vendors Sie Chee Din and Wong Meng Jie in exchange for their entire 400,000 share stake in BSB. 

Completion of the share acquisition is targeted for the fourth quarter of 2026.

BSB was incorporated in 2004 and is primarily involved in the wholesale of cables and related products for security systems.

According to the filing, BSB’s unaudited financial year 2026 (FY2026) revenue came in at RM17.62 million, up from RM14.80 million in FY2025, with profit after tax of RM2.15 million against RM1.39 million a year earlier. Its net assets stood at RM11.53 million as at FY2026.

The issue price arrived at a 2.5% discount to the five-day volume-weighted average price of 59.49 sen.

Mikro said the purchase price was derived from a valuation by Asia Equity Research, which pegged BSB’s fair equity value between RM27.67 million and RM30.8 million.

The RM30 million consideration implies a price-to-earnings (PE) multiple of 13.97 times, which Mikro said falls within the range of comparable listed companies. 

Under the agreement, the vendors also gave a three-year profit guarantee and are committing to audited profit after tax of at least RM2 million, RM2.25 million and RM2.5 million between FY2026-FY2028, respectively. Shortfalls will be payable in cash to BSB.

Mikro said the acquisition extends its reach within the electrical and electronics ecosystem, adding wholesale and distribution capabilities to its existing manufacturing operations and providing access to BSB’s customer and supplier network. 

“It is also expected to broaden the group’s product offerings and provide access to additional customer segments and end-user markets, including those involved in security and surveillance systems,” said the group. 

On a pro forma basis using Mikro’s 18-month financial period ended Dec 31, 2025, the deal would have lifted group earnings per share to 2.80 sen from 2.77 sen, and net assets per share to 26 sen from 25 sen, while gearing would rise to 0.05 times from 0.03 times. Mikro said it will not assume BSB’s existing liabilities under the deal.

The acquisition does not require shareholder approval but remains subject to Bursa Securities’ approval for the listing of the new shares. 

KAF Investment Bank Bhd was appointed as the adviser for the planned acquisition.

At Wednesday’s noon break, shares of Mikro were up by two sen or 3.3% to 63 sen. This gave it a market capitalisation of RM761.2 million.