KUALA LUMPUR: Sunzen Biotech Bhd's 70 per cent-owned Ecolite Biotech Manufacturing Sdn Bhd is buying a 10 per cent stake in Farmer International Holdings Sdn Bhd for RM4.32 million or RM43.20 per share.
Sunzen today signed a subscription agreement (SA) with Farmer International, Teo Chin Hong, Teo Chin Wang and Teo Soon Huat for the acquisition.
Farmer International has three wholly-owned namely Herbal Farmer Retail Sdn Bhd, BHH Products Sdn Bhd, and Sensei Yo Integrated Sdn Bhd.
Herbal Farmers particularly has 10 outlets selling Chinese herbals in key shopping malls across Kuala Lumpur, Johor and Penang.
According to Sunzen, Farmer International and the existing shareholders had provided a net profit guarantee of a minimum RM9.6 million for the financial years from Jan 1, 2024 to March 31, 2026.
Additionally, it said as long as Ecolite remains a shareholder of FIHSB, both parties undertake to make a minimum order of RM10 million and a guaranteed order of RM5 million during the same period.
The profit guarantee and guaranteed order are secured by a personal guarantee from the existing shareholders of Farmer International.
Sunzen group managing director Teo Yek Ming said the collaboration stems from a shared vision of providing consumers with healthier, natural, and high-quality products.
"Understanding each other's industry backgrounds, we are confident that joining forces with Herbal Farmer and Ecolite will bring about mutually beneficial opportunities.
"Herbal Farmer's innovative new retail sales model, combined with Ecolite's robust scientific research and manufacturing expertise in the health and wellness sector, positions us for unparalleled growth," he added.
Sunzen executive chairman Ching Chee Pun said the partnership represents a strategic move towards optimising the company's product supply chain.
Through the integration of supply chain resources, Sunzen aims to achieve more efficient production and supply, lowering costs and enhancing overall competitiveness.
"The collaboration allows us to meet market demands more effectively. I anticipate significant positive outcomes and benefits for Sunzen," he added.