PETALING JAYA: Bintai Kinden Corp Bhd will acquire 100% equity interest in Johnson Medical International Sdn Bhd for RM50 million after obtaining shareholders’ approval at its extraordinary general meeting (EGM) today.
The acquisition will be satisfied via a combination of RM26 million cash and the issuance of 58.5 million new ordinary shares in Bintai Kinden at 41 sen each.
The acquisition will allow Bintai Kinden Group to expand its existing customer base and widen its mechanical and electrical engineering service offerings to include the healthcare services industry in Malaysia.
Bintai Kinden deputy CEO Azri Azerai (pix) said the acquisition is a horizontal acquisition by the company to expand its core businesses related to construction.
“The acquisition allows the company to gain immediate access into an ongoing business with unbilled order books of approximately RM34.6 million, comprising supply and installation of medical-related equipment and construction of medical-related facilities such as operating theatres, ventilation systems, medical supply facilities and gas supply equipment in Malaysia. Accordingly, the acquisition is expected to be earnings accretive to the enlarged Bintai Group when Johnson Medical materialises the profits therefrom.
“The acquisition will enable the Bintai Kinden Group to leverage on the expertise, know-how, skills, and resources of Johnson Medical to expand its construction business segment, tender larger construction projects in the medical and healthcare industry as well as enhance the group’s presence in the construction industry,“ he said in a statement.
The acquisition will come with a guaranteed net profit of RM9.1 million over two years which translates into an average net profit of RM4.55 million for the FY2022 and FY2023, respectively.
At the EGM, the shareholders also approved Bintai Kinden’s proposal to undertake the development of Holistica Penang as part of its strategy to diversify its business to include property development and management instead of depending solely on M&E engineering.
Holistica Penang in George Town has an estimated gross development value of RM83.66 million. It is a lifestyle condominium hotel (condotel) project consisting of a 21-storey building with 98 condotel units, which include studio and one- to three-bedroom units with sizes ranging from 484 sq ft to 1,362 sq ft.
In addition, Bintai Kinden obtained shareholders’ approval to undertake a private placement and issuance of redeemable convertible preference shares (RCPS) to raise funds to part-finance the acquisition of Johnson Medical, the development costs of Holistica Penang, for working capital requirements and to be used as reserved funds for future business expansion.
The private placement entails the issuance of up to 114.57 million shares, representing 30% of the company’s share capital at an indicative price of 30 sen per share.
The issuance will entail the subscription of up to 190.95 million RCPS in tranches by boutique fund management company OUD Asset Management Sdn Bhd at 10 sen per share.
The acquisition of Johnson Medical, private placement and issuance of RCPS are expected to be completed by the first half of 2022.
To date, Bintai Kinden has ongoing M&E and construction projects with a total contract sum of RM234 million, which will keep the company busy until June 2023.