KUALA LUMPUR: Xin Hwa Holdings Bhd is acquiring a 79 per cent stake in Micron Metal Engineering Sdn Bhd for RM19.75 million.
In a statement today, the integrated logistics services provider signed a conditional share sale agreement with Hoon Eel An, Chia Ming How and See Kai Mun for the acquisition.
The company said the acquisition would be satisfied via a combination of cash and issuance of new Xin Hwa shares.
Upon completion, Micron will be a 79 per cent-owned subsidiary of Xin Hwa.
Managing director Ng Aik Chuan said the acquisition would generate an additional income stream for the company.
"Micron has an established and robust financial track record for the past three financial years up to the financial year ending December 31, 2021, while consistently generating positive net operating cash flow.
"The current leadership of Micron will remain and steer the company forward with the guidance from our Board and management.
"The new income stream is set to elevate our bottom line and accelerate the performance recovery of Xin Hwa.
"On another note, we also see a pick-up in demand for our existing logistic services with international borders having reopened in many parts of the world.
"All in all, it is certainly much better times ahead for the group," he said.
Having commenced operations in 2004, Micron is a homegrown precision machining components and parts manufacturer.
It focuses on the manufacturing and supply of shafts, precision parts and small metal attachments to the office automation, medical equipment and oil and gas industries.
With nearly 20 years of experience in the industry, 89 per cent of Micron's revenue will be derived from Malaysia in 2021, while exports contribute the rest to Singapore.
It owns and operates two manufacturing premises in Ulu Tiram, Johor, with a total built-up area of 15,084 sq ft.