KUALA LUMPUR, March 18, 2024 – Ge-Shen Corporation Bhd (Ge-Shen), a leading
contract manufacturer has entered a non-binding term sheet to acquire 60 per cent
stakes each in Amity Research & Development Sdn Bhd (ARD), an engineering and
consultancy services provider in the E&E industry and Amity Technical Services &
Consultancy (M) Sdn Bhd (ATSCM), a manufacturer specializes in printed circuit
board assembly (PCBA), product box building, and cable and wire assembly.
The said acquisitions will incur a cost of RM13.5 million for the Company, which will
be entirely funded through internally generated funds and bank borrowings.
The proposed acquisition involved purchasing 60,000 shares of ARD and 300,000
shares of ATSCM from the existing shareholders, Pak Yue Leong, Tan Chung Ken,
Tan Guan Lai, Tan Khay Leang, Tan Kooi Loon, and Teh Sheh Chien.
Upon signing the term sheet, the company is expected to execute the share sales
agreement within 60 days, with full payment to be completed within 3 months
following the execution of the agreement.
The Company said the acquisition is expected to be completed by the third quarter of
2024.
Based on audited statements, ARD achieved RM 0.44 million of PAT, while ATSCM
attained RM 1.73 million of profit after tax (PAT) for the financial year ending 31st
December 2022.
The purchase justification is based on a price-to-earnings ratio of 4.5 times derived
from a minimum PAT of RM3.0 million per year for the targeted companies, totalling
RM6 million for the guaranteed period of FYE 31 December 2024 and 2025.
“This proposed acquisition will expand Ge-Shen’s scale of operations and facilitate the
group’s presence in such a market. It is also in line with the group’s objective of
acquiring strategic stakes in companies involved in high value-added industries with
potential for future growth,” the Company said.
The Bursa main market-listed company is actively pursuing its growth and
diversification strategy into the electronic manufacturing services (EMS) sector with
the recent M&A activities, positioning itself well for a tech upcycle in the coming
quarters.