KUALA LUMPUR: Berjaya Corp Bhd (BCorp) is acquiring a 100 per cent stake in Singer (Malaysia) Sdn Bhd from Berjaya Retail Sdn Bhd (BRetail) for a net payment of RM388 million.
This is after setting of inter-company debts of the Singer Group of RM148 million.
BCorp said the acquisition was against the purchase consideration of RM536 million.
In an exchange filing today, BCorp said it had signed a memorandum of understanding (MoU) with BRetail and Tan Sri Vincent Tan Chee Yioun, the major shareholder of both companies.
As at December 31 last year, BCorp said the unaudited net assets of the Singer Group was at RM561 million.
"The acquisition will involve the issuance of new BCorp shares at an issue price of 33 sen each, representing a premium of 14 sen or about 74 per cent over last Friday's closing price of 19 sen per BCorp share," it said.
BCorp will issue about 1.17 billion new shares for the net payment of RM388 million.
Additionally, Tan will provide to BCorp a profit guarantee that Singer would achieve a net profit after tax of RM20 million per year for the financial years ending December 31, 2020 and 2021.
"Based on net payment of RM388 million for the 100 per cent stake in Singer, this profit guarantee of RM20 million per year will translate to a net price-earnings multiple of 19.4 times," it added.
Singer is a household brand in Malaysia with an existing issued share capital of RM438 million.
The Singer Group is principally involved in marketing, retailing and direct selling of consumer durable products and motorcycles on cash, credit, hire purchase schemes, equal payment schemes and credit sales schemes.
The history of the "Singer" brand name in Malaysia started in 1906 with the opening of the first branch office by Singer Sewing Machine Company of the US to sell its sewing machines.
To-date, Singer's portfolio of products has extended to a diversified range of home appliances, furniture as well as motorcycles.
Tan said Singer had been in Malaysia for more than 100 years and was a well-known and trusted household brand name, with a wide retail network of more than 450 stores nationwide and about 3,000 independent sales agents.
"I am confident that the acquisition of Singer will enhance the profile of our group and complement BCorp's diverse range of businesses.
"I believe that the acquisition will contribute positively to the future earnings of the BCorp Group," said Tan, which is also BCorp executive chairman.