BINTAI Kinden Corporation Bhd will acquire Johnson Medical International Sdn Bhd for RM50 million to expand its healthcare business segment, the group said in a bourse announcement recently.
The group said it had entered into a Memorandum of Understanding with Yeo Eng Lam to acquire approximately three million ordinary shares or a 100 per cent stake in Johnson Medical.
“The proposed acquisition would be satisfied via a combination of cash amounting to RM26 million and the issue of approximately 58.54 million new ordinary shares in Bintai Kinden at 41 sen each,” the company said.
Bintai Kinden executive Vice- Chairman Ibrahim Othman said, the proposed acquisition presents a strategic opportunity for the company to expand inorganically, via acquisition of businesses or investments that are in similar industries to its existing core business in the construction sector.
“The corporate exercise will also enable the company to expand its products and services offering in addition to its current distribution of Greenie Medi Cold Chain Box designed for storage and distribution of Covid-19 vaccines under its healthcare business segment.
“It will allow Bintai Kinden to tap into the healthcare segment to supply and install various medical devices such as medical pendants, mobile and modular healthcare units, bedhead panels, mobile surgical units and trauma workstation to capture the demand for healthcare business as a result of the Covid-19 pandemic,” he said.
Under the agreement, the vendor will provide Bintai Kinden with a profit guarantee of RM3.5 million and RM5.6 million for the financial years ending Dec 31, 2021 (FY21) and FY22 respectively.
Barring any unforeseen circumstances, the corporate exercise is expected to contribute positively to future earnings and improve the financial position of Bintai Kinden, the company said.