Tomypak plans to buy 70% in EB for RM73.5mil

KUALA LUMPUR: Tomypak Holdings Bhd, through its wholly-owned subsidiary Tomypak Flexible Packaging Sdn Bhd (TFP), has proposed to acquire 70% equity interest in EB Packaging Sdn Bhd for RM73.5mil.

This comprises the proposed acquisition of 29.29% equity interest in EB from Siow Chew Kiong, Teo Kee Lin, Hoo Jik Heng and Teo Peng Hong (collectively, promoters) for RM30.75mil, as well as the acquisition of 40.71% equity interest from RMCP Plastics Holdings Sdn Bhd for RM42.74mil.

In a filing with Bursa Malaysia, the company said it had also proposed a call and put option agreement with the promoters for the acquisition of the remaining 30% equity interest in EB for RM31.5mil.

The purchase would be funded using the proceeds from the insurance compensation payment for the fire incident at TFP’s main manufacturing plant in Senai, Johor, on Dec 19, 2021, and/ or bank borrowings, if required.

EB is a well-established player in the flexible plastic packaging industry, and the acquisition would increase Tomypak’s market share in the flexible plastic packaging industry, as both Tomypak and EB cater to different customer segments.

“Tomypak’s customers are mainly food and beverage manufacturers while EB’s customers are from various industries, namely food, electronics, industrial packaging, building materials, furniture, garment, medical (healthcare) and logistics.

“The proposed acquisition will allow Tomypak and EB to tap into each other’s customer base,” it said.

Since EB is already income-generating and profitable, Tomypak said the completion of the acquisition would enhance the group’s earnings with the consolidation of EB’s financial results.

Barring any unforeseen circumstances, the proposed acquisition is expected to be completed in the fourth quarter of this year. — Bernama