KESM to acquire remaining 34.62% of KESM Test for RM35mil

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KUALA LUMPUR (Feb 13): KESM Industries Bhd is acquiring 692,308 shares, representing the remaining 34.62% stake in its subsidiary KESM Test (M) Sdn Bhd, from Sunright Ltd for RM35 million.

Following the acquisition, KESM Test will become a wholly-owned subsidiary of KESM (fundamental: 2.35; valuation: 2.4), the group said in a statement today.

The purchase consideration is to be satisfied by internally-generated funds, according to KESM.

"This has come at a most opportune time in strengthening our commitment to maintain our market leadership as a fully independent test service company,” said KESM's executive chairman and chief executive officer Sam Lim.

"Our investments in testing services have yielded steady growth over the years," Lim said, adding the company is now focusing on the testing of devices for the automotive market, which is enjoying a surge.

"The global car sales is expecting to reach 74 million units in 2015, and this will be a new record,” he elaborated.

Lim expects the contents of electronics in vehicles such as infotainment, advanced driver assistance systems, air bag systems, battery management, safety systems, to grow in the next decade.

He believes the acquisition will further enhance the group's growth in the testing of automotive devices.

Meanwhile, the group also approved an interim dividend of 3 sen, amounting to RM1.29 million which is payable on April 10 this year.

This special dividend is an appreciation to the shareholders for their stalwart support, the group said.

Shares of KESM gained 1 sen or 0.41% to close at RM2.47 today, translating into a market capitalisation of RM105.82 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)