Kim Teck Cheong aims to double revenue by acquiring competitor

KUALA LUMPUR: Kim Teck Cheong Consolidated Bhd (KTC), already one of the largest consumer packaged goods distributors in Sabah and Sarawak, expects to double its revenue with the proposed acquisition of Sibu-based distributor and wholesaler Popular Trading (Borneo) Corp Sdn Bhd.

The company, which made its listing debut last November, told Bursa Malaysia that it had signed a memorandum of understanding (MoU) to acquire 100% equity interest in Popular Trading.

It said the purchase price would be a sum equal to 100% of Popular Trading’s net assets value as at Dec 31, 2015 and a sum equivalent to twice the average net after-tax profit for the financial years ended Dec 31, 2013 to 2015.

According to KTC, Popular Trading is a prominent household name in Sarawak with 48 years of experience in the line of distribution, wholesale trading and food manufacturing covering Sarawak, Sabah and Labuan.

KTC group executive director Dexter Lau said in a press statement that KTC entered the Sarawak market two years ago and the business in the state had grown by a strong double digits.

The proposed acquisition, he said, “will expand our trading business, network, infrastructure and also increase our human resource by three times our present capacity in order to meet with the huge expansion plans we have targetted and planned. We shall further leverage on their human capital and asset, bringing with them a wealth of experience and years of relationship built over the years within their highly influential network.”

KTC shares fell half a sen to close at 44.5 sen on Monday, with 12.73 million shares changing hands.