KUALA LUMPUR: Tiong Nam Logistics Holdings Bhd is acquiring VM Andaman Sdn Bhd (VN Andaman) for RM30 million as part of its effort to expand its logistics warehousing capacity.
In a statement today, the integrated logistics services provider said the acquisition of VN Andaman included with its warehouse asset at Pelabuhan Tanjung Pelepas in Johor.
Tiong Nam said the acquisition was expected to be completed by September 8 this year.
VM Andaman's warehouse has a built up area of 158,013 sq ft and is situated on a 2.7-hectare land.
Tiong Nam said the inclusion of the new warehouse woud increase its warehousing capacity by 2.6 per cent to 6.2 million sq ft from 6.0 million sq ft as at March 31 this year.
The group said it had today entered into a sale and purchase agreement with VM Andaman's vendors, Kwasa Logistics Sdn Bhd (Kwasa) and Goodman SEA Investments No. 1 Ltd (Goodman), to acquire 9.07 million shares in VM Andaman, representing 100 per cent of the company's total issued shares.
Tiong Nam managing director Ong Yoong Nyock said the group had consistently registered higher deliveries and warehousing volume across industries for the past few quarters.
This is especially on essential segments such as food and beverage, electrical appliances, and information and technology equipment, spurred by the work from home normality amid the Covid-19 pandemic.
"The strong performance registered by our logistics and warehousing segment is also helped by the increasing trend of companies outsourcing their logistics requirements to specialist providers like us, as they strive to enhance operational efficiency by focusing on their core business and competitive edge," he said.
Ong said the acquisition allowed the group to better serve its customers' logistics and warehousing needs, while increasing its warehouse capacity.
The warehouse has a market value of RM30.5 million, as ascribed by independent market valuer Burgenns Valuation Sdn Bhd.
Tiogn Nam said the purchase would be fully funded by internally generated funds, of which RM24.0 million would be used to subsume the existing vendor loans by Kwasa and Goodman.