KUALA LUMPUR (July 12): Shares in flexible plastic packaging (FPP) manufacturer Daibochi Bhd rose 1.03% at the midday break today on securing shareholders' approval to acquire the entire equity of fellow FPP player Mega Printing & Packaging Sdn Bhd (MPP) for RM125 million cash.
Daibochi rose 2 sen to RM1.96 for a market capitalisation of RM642.68 million.
In a statement yesterday, Daibochi managing director Thomas Lim said the acquisition was opportune in positioning the group favourably to capture FPP demand in Malaysia and abroad.
"This acquisition opens up a myriad of opportunities for us to expand our manufacturing capacity, increase our customer base, and derive substantial synergies in the areas of technical resources, research and development (R&D), and raw material procurement.
"Vitally, this acquisition sets a new base in our market share for food and beverage (F&B) packaging in the region. Daibochi's predominantly multinational clientele would be complemented by MPP's customers mainly comprising local players. Together, we aim to set industry benchmarks in product quality and competitiveness towards expanding our regional footprint," he said.
Daibochi will acquire 4.5 million ordinary shares in MPP.
The RM125 million purchase price, funded through internally-generated funds and bank borrowings, represents an enterprise value over EBITDA of 8.07 times based on MPP's audited financial results for the financial year ended Dec 31, 2017.