Malaysia’s Top Glove acquires Adventa Capital unit Aspion for $345m

Top Glove Corporation Bhd, Malaysia-listed leading rubber glove maker, has entered into a deal to fully acquire Aspion Sdn Bhd, a wholly owned subsidiary of Adventa Capital Pte Ltd, for RM1.37 billion ($345 million), according to an announcement on the Malaysian Stock Exchange.

The acquisition of Aspion makes Top Glove one of the world’s largest surgical glove manufacturers.

The majority of the purchase consideration amounting RM1.233 billion (about $310 million) is to be paid in cash while the rest, RM137 million (about $34 million), will be paid by issuing 20.505 million new ordinary shares of Top Glove at a price of RM6.6813 (about $1.7).

The portion of cash is expected to come through a conventional term loan, about 90 per cent of U.S. dollar denomination and Islamic term financing.

Started in 1991, Top Glove has a production capacity of 51.9 billion pieces of gloves per year (1 billion for surgical and 50.9 billion for examination gloves), handled through 33 factories across Malaysia, China, Thailand, U.S. and Germany. The acquisition has emerged as among the biggest investments made during the listing tenure.

With a successful acquisition, Top Glove will be able to tap into the facilities of Aspion Group which has an operational annual production capacity of about 4.6 billion gloves.

Top Glove is estimated to see an increase in the total annual production capital of 2.5 billion pieces of surgical gloves and 54 billion pieces of examination gloves post acquisition.

In terms of expanding the product range, the Group is expected to see an increase to synthetic surgical gloves product line and increase exports to developed countries like North America, Western Europe and Japan.

Top Glove’s make cap is RM10.919 billion, traded at about RM8.70 per share.

Other Malaysian Exchange listed companies involved in the glove manufacturing include Hartalega Holdings, Kossan Rubber Industries, Riverstone Holdings, Supermax Corporation and Comfort Glove.

Back in November 2017, Top Glove also announced the purchase of printing and packing material maker, Eastern Press Sdn Bhd for a $10.9 million deal, expecting the glove maker to improve its supply chain direction.

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