PETALING JAYA: Opcom Holdings Bhd has proposed to acquire a 40% stake in Unigel (UK) Ltd, a company that supplies the fibre optic cable manufacturer with a critical component for its manufacturing operations.
Opcom has proposed to acquire the 40% stake from five individuals, namely, Gary Steven Robinson, Richard Barrie George, Ian Charles Hatchell, Mukhtiar Singh Sohal and Richard Michael Rund, for RM11.65mil (US$3.68mil).
Unigel Technologies Ltd, a company owned by Hikari Capital Ltd, has proposed to acquire the remaining 60% stake in Unigel.
The proposed transaction, to be paid in cash, values the entire Unigel for US$9.19mil (RM29.13mil).
In an announcement yesterday, Opcom said the acquisition price was based on a price earnings multiple of approximately 7.21 times based on the average profit after tax recorded by Unigel in recent quarters.
Also, the vendors would not be able to go into competing businesses or solicit Unigel’s existing customers for five years.
Unigel manufactures and supplies thixotropic compounds and related compounds to the global fibre optic cable industry.
It also undertakes research and development and the formulation of specialty insulation and various applications in the oil and gas, and construction industries. Currently, Unigel supplies to cable manufacturers in over 20 countries globally.
According to Opcom, the proposed acquisition represents an investment to obtain a strategic stake in the supplier of a critical component in the production of Opcom’s fibre optic cables, which is thixotropic gel.
For more than 10 years now, Opcom has sourced the supply of thixotropic gel, which is required for the process of stranding, i.e, to assemble loose and ribbon fiber into slotted core, from a single supplier – Unigel.
Opcom relies on the thixotropic gel only from Unigel due to the track record and reliability of the gel that protects fibre in the cable, increases its durability and maintains the functionality of the fibre optic cables over their life span of approximately 25 years.
In conjunction with the proposed acquisition, Opcom announced a bonus issue of one for every four shares held on an entitlement date to be determined later.
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