KUALA LUMPUR: Mikro MSC Bhd has signed an agreement with Singapore's Calida Group Pte Ltd to acquire signage and interior fit-out company TES Productions & Projects Pte Ltd for RM30 million of shares in Mikro MSC.
The deal will be done through the issuance of 134.8 million new ordinary shares in Mikro MSC at 22 sen per share.
Once the acquisition is finalised, TES will become a wholly-owned subsidiary of the company, and is expected to contribute over 25 per cent of the net profits for Mikro MSC and its subsidiaries.
In a filing with Bursa Malaysia Securities, Mikro MSC said it plans to diversify the current operations to include the design, manufacture, and installation of signs and advertising displays, as well as offering interior fit-out services.
"The acquisition represents a strategic opportunity for the company to expand its footprint in Singapore, diversify its revenue streams and reduce dependency on a single geographical market."
"By entering the new market segment where the signage and interior fit-out businesses operate, the company aims to broaden its customer base and capture additional revenue streams to reduce the risk of over-reliance on its existing businesses," it said.
The acquisition will allow Mikro MSC to tap into TES' existing client base, which strategically aligns with its target market.
"It will introduce Mikro MSC to new customer base and effectively expand its presence in Singapore, thereby facilitating its growth and market penetration initiatives," it added.
Calida Group will guarantee on a joint and several basis to the company, that the audited net profit after tax of TES for the financial year ending Dec 31, 2024 (FYE 2024) shall be not less than S$800,000, and the audited net profit after tax of TES for the FYE 2025 shall be not less than S$ 890,000.
Mikro MSC's share price saw a 3.7 per cent increase earlier to 28 sen, giving it a market capitalisation of RM284.4 million.