KUALA LUMPUR: Pecca Group Bhd is diversifying into the healthcare sector with the acquisition of 204,000 shares or 51 per cent stake in Rentas Health Sdn Bhd for RM100 million from Teoh Zi Yuen.
In an exchange filing today, the automotive leather upholstery manufacturer said this would be satisfied via a combination of cash and issuance of new shares in Pecca.
"Fifty per cent of the purchase acquisition or RM50 million will be from thevissuance of 11.99 million new Pecca shares at an issue price of RM4.17 per share.
"The remaining RM50 million balance will be in the form of cash consideration to be paid upon receiving confirmation by the independent auditors that the profit after tax of Rentas Health for the financial year ending June 30, 2022 (FY22) is no less than RM23.0 million," it said.
Incorporated in Malaysia on April 16, 2019, Rentas Health is a private limited company and is principally involved in the supply of medical equipment.
This includes Covid-19 test kits and personal protective equipment (PPE) and related products i.e. face masks, coveralls, jumpsuits, face shields, hand sanitiser and disinfectant.
Pecca said the acquisition would increase its presence in the healthcare sector, by extending its product range and providing additional revenue stream.
"It also allows the group tap into existing customer base and distribution networks of Rentas Health to attain a wider customer outreach and to achieve business synergy between our existing healthcare business and the new Rentas Health's business," it added.
Pecca group managing director Datuk Teoh Hwa Cheng acknowledged that business conditions had significantly changed because of the Covid-19 pandemic.
"We saw immediate need to embrace new ways of doing business in order to ensure that we remain relevant in the new business environment.
"This dynamism and agility led us to the diversification into the healthcare business which we believe would be the business of the futures," he said in a statement.
Teoh said there could be a profit guarantee of no less than RM23 million on Rentas for FY22.
"We believe the demand for masks, PPE and other covid products will be here to stay as more officials describe Covid-19 as an endemic, similar to the likes of HIV and Hepatitis C.
"To continue maintaining our competitive edge, we will dedicate efforts to R&D which has always been the ingredient of success for our group for more than 25 years.
"With this new business added into our group, we are now ready to roll out our vision for Pecca 2.0, our new growth ecosystem that will pave Pecca to new heights," he added.