PETALING JAYA: Chin Hin Group Bhd on Monday acquired a 31.2% equity interest in Signature International Bhd for RM93.6 million cash to venture into the business-to-consumer (B2C) segment.
A filing with Bursa Securities showed that the company had entered into a conditional share sale agreement with two major shareholders of Signature namely Tenyin Holding Sdn Bhd and Datuk Chooi Yoey Sun to acquire 15.6% equity interest each for the acquisition based on the purchase consideration of RM1.17 per share.
Post-acquisition, the shareholdings of Tenyin and Chooi in Signature will be reduced to 12.54% and 9.48% respectively.
The purchase consideration of RM1.17 per sale share represents a 18% premium to the five-day volume weighted average market price of Signature shares up to the last practicable date (LPD) of RM0.9918. The acquisition will be funded through a combination of internally-generated funds and bank borrowings.
Commenting on the latest corporate exercise, Chin Hin group managing director Chiau Haw Choon (pix) said the acquisition represents an opportunity for the company to expand its product range from building materials into quality kitchen, home and living solutions.
“The exercise will enable the company to tap into the B2C segment as Signature’s products are not only supplied to property development projects but also directly to consumers through its many retail outlets located locally as well as overseas.”
As an integrated builder that primarily serves other building and construction companies in Malaysia, Chin Hin views its ventures into home & living solutions as a strategic move to transition from a B2B business model to B2C.
Chiau said both companies are operating in and servicing the same industry, which are the construction and property development industry, thus this arrangement can provide synergistic benefits to both parties in the long run. Chin Hin can also tap into the order book of Signature which as at Dec 31, 2020 amounted to RM195 million for the kitchen and wardrobe system and RM234 million for the glass and aluminium segment.
In addition, Chin Hin will also be able to consolidate the financial results of Signature, which is expected to increase the profitability and strengthen the financial position of the group.
Source: The Sun Daily
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