KUALA LUMPUR (Oct 8): Printing and labelling firm MTAG Group Bhd (KL:MTAG) is proposing to acquire two label manufacturers for an indicative RM13.8 million in cash to expand its product offerings and customer base.

The group has signed a letter of intent (LOI) with Khor Chun Chuan to acquire the entire stake in LH Label (M) Sdn Bhd and LH Labelprint Sdn Bhd, according to a Bursa Malaysia filing on Thursday. Khor is the sole shareholder of both companies, which manufacture and supply labels and related printing products.

“The proposed acquisition will enable the group to explore potential operational and commercial synergies between the target companies and the group’s existing businesses,” MTAG said. “The board is of the view that the proposed acquisition, if completed, is in line with the group’s strategy to expand its business operations in the label and printing industry.”

The acquisitions would broaden its product range and customer base, while giving it access to the target companies’ operations, customer relationships, resources and industry experience, MTAG said. 

The RM13.8 million indicative price tag remains subject to satisfactory legal, financial, tax and operational due diligence, as well as further negotiations between the parties, it added. 

MTAG intends to fund the acquisitions using internally generated funds. As at June 30, 2026, it had cash and cash equivalents of RM8.02 million and no borrowings. The indicative purchase price, thus, is about RM5.78 million above that reported cash balance.

The proposal is also conditional on an independent valuation of the target companies’ landed properties and approval from MTAG’s board. If the conditions are not met within three months of the LOI’s acceptance, or an agreed extended period, the earnest deposit will be refunded in accordance with the LOI’s terms, the group said. 

MTAG shares closed unchanged at 20 sen on Thursday, giving the group a market capitalisation of RM133.21 million. The stock has declined 20% year to date.