KUALA LUMPUR (Jan 29): Kim Teck Cheong Consolidated Bhd (KTC) has signed a share sale agreement for the acquisition of the entire shareholding of Popular Trading (Borneo) Corp Sdn Bhd at an estimated price of RM6 million, to expand its presence in East Malaysia.

"The proposed acquisition is in line with our expansion plan to further develop our business in East Malaysia. Once we complete the acquisition, Popular Trading will provide us with an additional strong channel of resources for us to achieve our business goals and boost our financial growth," said KTC executive director Dexter Lau in a press statement today.

The estimated purchase price of RM6 million is still subject to adjustments, as it depends on a due diligence that will take into account Popular Trading's net asset value as at Dec 31, 2015 and its net profit after tax for the past three years, said KTC.

The acquisition will be funded by either internally generated funds, bank borrowings or a combination of both. KTC expects to complete the acquisition by the second quarter of 2016.

The agreement follows a memorandum of understanding signed between the two companies on Jan 11, 2016, for the proposed acquisition.

Popular Trading is involved in the distribution, wholesale trading and food manufacturing in Sarawak, Sabah and Labuan. The brands it distributes include Darlie, Pokka, Ribena, Bio-Essence, Yara, GlaxoSmithKline and Ginvera.

Shares in KTC gained two sen or 5.26% to close at 40 sen, giving a market capitalisation of RM194.3 million.

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