Malaysia-based packaging manufacturer Daibochi Bhd is acquiring plastic packaging printer and manufacturer Mega Printing & Packaging Sdn Bhd for RM125 million ($30 million) cash, it said in a filing with Bursa Malaysia on Friday.
It said it is entering into a sale and purchase agreement to acquire all 4.5 million shares in MPP from Tan Chai Koon, Chong Choi Chun, Ng Yuk Ming, Proshin Enterprise Sdn Bhd, Phang Chak Thong, Ng Pey Ching and Lee Chee Keong.
The deal is expected to be completed by the third quarter of this year. To fund the acquisition, Daibochi said 20 per cent of the purchase price, RM25 million, would be internally generated, and the balance 80 per cent, amounting to RM100 million, would come from bank borrowings.
According to Daibochi, the acquisition allows the group to horizontally expand within the plastic packaging sector.
“This, in turn, allows the group to expand its marketshare and to sustain competitive advantages within the plastic packaging sector, as well as to widen its customer and supplier base, and enhance its product range,” said Daibochi.
In addition, Daibochi would be able to derive benefits such as a greater network of customers and suppliers, the pooling of resources such as technical expertise and market insight, buying raw materials in bulk, and increasing its marketing and distribution channel’s efficiency and effectiveness.
Bursa-listed Daibochi is a flexible packaging provider with manufacturing facilities in Malaysia and Myanmar. Its clientele comprises mainly multinational corporations in the food and beverage, fast-moving consumer goods, and specialty sectors. Last November, Daibochi’s bigger rival Scientex Bhd had picked a 42.41 per cen controlling stake in the company for $53 million