KUALA LUMPUR (Jan 26): Sunzen Biotech Bhd has reentered into a share sale agreement (SSA) with vendors of Ecolite Biotech Manufacturing Sdn Bhd for the acquisition of a 70% stake in Ecolite for RM12.05 million.

In a statement today, Sunzen said the purchase consideration will be wholly satisfied through the issuance of 40.85 million new shares in Sunzen at an issue price of 29.5 sen per Sunzen share.

The animal health care products maker had initially proposed the acquisition in July last year as a step towards diversifying its activities to include manufacturing and trading of traditional Chinese medicines and herbal health foods and beverages. However, it was called off in November due to issues arising from the due diligence conducted on Ecolite and its subsidiaries, with the parties mutually agreeing to terminate the SSA.

“Sunzen has reconsidered this proposal as the due diligence issues have been resolved to the satisfaction of the group. At the same time, we believe that this proposed acquisition will generate more value to our shareholders,” said Sunzen chief executive officer Hong Choon Hau in the statement.

The group plans to leverage its biotechnology expertise to grow Ecolite’s business and said it will gain a foothold in the China bird’s nest export market.

Sunzen highlighted that Ecolite, through its 70% subsidiary Yanming, is one of 19 companies in Malaysia which has obtained approval of Chinese authorities to export raw, clean and edible bird’s nest to China.

“Moving forward, we are very optimistic with this business venture as it will open new markets, as well as strengthen our global distribution network with new lines of product offerings,” Hong said.

Sunzen shares rose 5 sen or 1.67% to 30.5 sen today, giving it a market capitalisation of RM146.89 million.