Malaysian packaging corporation, Tomypak Holdings Bhd (Tomypak), has unveiled plans to acquire a 70% stake in EB Packaging Sdn Bhd (EB), a well-known player in the flexible plastic packaging industry, for RM73.5 million. This strategic acquisition will be channelled through Tomypak’s wholly-owned subsidiary, Tomypak Flexible Packaging Sdn Bhd (TFP).
As stated in a Bursa Malaysia filing, the acquisition comprises a 29.29% equity interest in EB from four promoters – Siow Chew Kiong, Teo Kee Lin, Hoo Jik Heng and Teo Peng Hong – for RM30.75 million. In addition, Tomypak will acquire a 40.71% stake from RMCP Plastics Holdings Sdn Bhd for RM42.74 million.
Also Read: 1664 Blanc Elevates Its Brand with a Modern Redesign by Carlsberg Group
Tomypak further proposes a call and put option agreement with the promoters to acquire the remaining 30% equity interest in EB for RM31.5 million. This purchase will be financed using insurance compensation from a fire incident at TFP’s primary manufacturing facility in Senai, Johor, on December 19, 2021. Bank borrowings will supplement this if necessary.
This acquisition will allow Tomypak to expand its market share in the flexible plastic packaging industry. Despite both companies operating in the same industry, they cater to distinct customer segments – Tomypak primarily serves food and beverage manufacturers, while EB serves a broad spectrum of industries, including food, electronics, industrial packaging, building materials, furniture, garment, medical, healthcare, and logistics.
The acquisition will offer Tomypak and EB opportunities to access each other’s customer bases, enhancing their market footprint. Moreover, considering that EB is already generating income and is profitable, the acquisition’s completion will boost Tomypak’s earnings by consolidating EB’s financial results. Subject to unforeseen circumstances, the acquisition is expected to conclude in the fourth quarter of 2023.
This news is based on information from The Star.
