PETALING JAYA: Freight-forwarding firm Tasco Bhd is marking its foray into cold chain logistics through the acquisition of Gold Cold Transport Sdn Bhd (GCT) for RM186.08mil.
In a filing to Bursa Malaysia, Tasco announced it had signed a sale and purchase agreement with Chang Kok Fai and Chan Sun Cheong to buy 100% in GCT Group.
GCT, which is one of the largest cold chain logistics players in the country in terms of storage capacity size, is principally involved in the business of transportation, cold room storage facilities, repackaging and value added facilities.
GCT group currently operates from its warehousing facility in Shah Alam with a total storage capacity of about 25,600 pallets and has developed into a full-fledged chilled and frozen food transporter.
Tasco, meanwhile, provides logistics services covering air, sea and land transportation. It also provides warehousing services and serves as a one-stop logistics centre to handle domestic and international shipments for its customers.
On the rationale of the proposed acquisition, Tasco said the business environment which it operates in is very competitive.
“In order to gain new ground, Tasco Group has to tap into the expertise within the Yusen network to venture into new areas of opportunity to further enhance its present strong logistics base.
“One such venture is into the niche area of cold chain logistics, which is a natural step forward given Tasco Group’s existing involvement in traditional ambient warehousing as well as the vast experience in the fast-moving consumer goods (FMCG) and retail industries,” it said in the filing with the stock exchange. Japan-based Yusen Logistics Co Ltd is Tasco’s holding company with a 55.38% stake.
Tasco added that GCT Group owns a sizeable fleet of 174 reefer trucks and operates cold room warehouses.
As such, the proposed acquisition would enable Tasco to enter the cold chain logistics business “in a significant way with its ready capabilities to cater to its multinational customers’ needs and also to serve a wide base of industries, namely the food, pharmaceuticals, chemicals, electronics and other segments.”
“Combining Tasco Group’s knowledge and logistics network with GCT Group’s operating scale of sizable fleet of reefer trucks and cold room capacity, the proposed GCT acquisition will provide Tasco Group with advantages to be the market leader in the cold chain logistics industry,” it said.
It also said the GCT Group had been profitable in the last three financial years and for financial year ending Nov 30, 2015, recorded revenue of RM67mil and a profit after tax of RM6.8mil.
“Furthermore, the vendors have warranted that the proforma consolidated earnings before interest, taxes, depreciation and amortisation of the GCT Group shall be about RM20.8mil for the financial year ending Nov 30, 2016,” it said.
It added that the initial deposit for the proposed acquisition amounting to about RM3.72mil was paid and funded via internally-generated funds of Tasco, while the balance purchase consideration, together with adjustments, is expected to be funded via borrowings and/or via advances from Yusen Logistics.
The exercise, which may result in a goodwill of RM114.6mil to be recorded in the financial statements of the company, is expected to be completed in the second quarter of this year.
Tasco shares closed down 3 sen to RM1.60 for a market capitalisation of RM320mil.
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