KUALA LUMPUR: Ge-Shen Corp Bhd, a contract manufacturer, announced a RM13.5 million deal to purchase stakes in two companies in the electric and electronic (E&E) industry, the same day it was issued an unusual market activity (UMA) query.
Ge-Shen said in a filing with Bursa Malaysia Securities Bhd, it entered into a non-binding term sheet to acquire 60 per cent stakes each in Amity Research & Development Sdn Bhd (ARD) and Amity Technical Services & Consultancy (M) Sdn Bhd (ATSCM) for RM13.5 million.
Ge-Shen is an engineering and consultancy services provider in the E&E industry, while Amity Technical is a manufacturer that specialises in printed circuit board assembly (PCBA), product box building, and cable and wire assembly.
Ge-Shen will fund the acquisitions through internally generated funds and bank borrowings.
The vendors of the deals Pak Yue Leong, Tan Chung Ken, Tan Guan Lai, Tan Khay Leang, Tan Kooi Loon and Teh Sheh Chien have committed to top-up any shortfall in the minimum profit after tax of RM3 million assured.
The deals will allow Ge-Shen to expand into manufacture of a wide variety of product range including but not limited to printed circuit board assembly (PCBA), product box built, cable assembly and electronic parts as well as designing electrical goods and components parts and providing consultancy services in relation to E&E.
This in turn will allow the company to increase its offerings, increase its revenue and earnings and grow additional recurring income stream.
The company said the acquisition is expected to be completed by the third quarter of 2024.
On the same day, Bursa Securities issued an unusual market activity query on the company after its share price jumped almost 20 per cent in a day to RM3.99 a share on Monday.